Tag: childcare

Universal Childcare Could Have Terrible Social Consequences

Some Democratic presidential candidates want to introduce government-funded, universal childcare programs.

The stated rationale is usually the need for targeted financial help for families with children. But this reasoning is usually buttressed by a faith that government-funded care or preschool would improve the life chances of the children using it.

Such assertions are based on extrapolating research findings from more limited programs targeted at those on low incomes, such as Head Start, the Perry Preschool Project and the Carolina Abecedarian Project. But assuming these results apply to more universal programs is fraught with danger. Wise heads, such as Nobel Prize winning economist James Heckman, have previously warned that:

A much more careful analysis of the effects of scaling up the model programs to the target population, and its effects on costs, has to be undertaken before these estimates [of their impact] can be considered definitive.

A new paper on the effects of the universal childcare program in Quebec (by economists Michael Baker, Jonathan Gruber, and Kevin Milligan) shows why Heckman was right to be cautious. The results are devastating for the case for universal care.

On a sweep of evidence of universal programs around the world, the paper concludes that “there is a little clear evidence that these programs provide significant benefits more broadly,” than for some disadvantaged children.

The results in Quebec were even worse. The government there introduced heavy subsidies for care for all children from ages zero through four in the 1990s, alongside regulations designed to improve “quality.” Maternal labor supply unsurprisingly rose, and child care services were used more heavily than in the rest of Canada.

Disturbingly, though, “there was a large, significant, negative shock to the preschool, noncognitive development and health of children exposed to the new program, with little measured impact on cognitive skills.” This included “increases in early childhood anxiety and aggression.”

Proponents of universal care usually say, to paraphrase, that “a good start in life is crucial to future wellbeing.” It stands to reason then that interventions that harm children can likewise have enduring scarring effects. When it comes to Quebec, this is exactly what the economists found.

Though their results find “no consistent evidence of a lasting impact of the Quebec program on cognitive test scores,” the rest of their findings are extremely worrying:

We do, however, find a significant decline in self-reported health and in life satisfaction among teens. Most strikingly, we find a sharp and contemporaneous increase in criminal behavior among the cohorts exposed to the Quebec program, relative to their peers in other provinces. We illustrate graphically a monotonic increase in crime rates among cohorts with their exposure to the child care program, and we show in regression analysis that exposure led to a significant rise in overall crime rates. We also report that these effects are primarily for boys, who also see the largest deterioration in noncognitive skills [the later includes aggression and hyperactivity].

The economists charitably conclude that their results confirm that early life interventions can have sustained impacts on life chances (implying the importance of doing childcare policy “right”).

A more pessimistic reader would foresee potentially disastrous social consequences from adopting the sorts of universal programs that Democratic candidates are pushing.

More on childcare, and a better way of helping families, here and here.

Childcare Regulation and Quality

David Boaz blogged today on the Washington Post story about a lawsuit regarding DC childcare regulations. DC is set to require directors of child-care facilities to obtain a bachelor’s degree in early childhood development, and assistant teachers and home-care providers to have Child Development Associate (CDA) certificates in the same subject.

The WaPo write-up follows the usual boilerplate for these discussions: on the one hand, providers say complying with the regulations will be burdensome and increase costs; on the other hand, the government talks up the educational benefits of the new regulations. This all implies there is a trade-off between quality and cost.

But is there? Actually, this is a classic example of the government’s argument not considering the market for childcare as a whole.

Yes, requiring child-care workers to achieve higher qualification levels could result in more highly trained formal caregivers, who can help children to develop from an educational perspective. Such a regulation might also provide a “quality assurance” effect for some particularly conscientious parents.

But the effect on the quality of care faced by the whole population of children is ambiguous. By restraining the supply of formal care via regulation, the price of formal care will rise. If the price of formal childcare rises, then some parents will decide to substitute to more informal forms of care or even have to stay home to care for their own children. According to the government’s definitions of “quality” (which may be quite different from parents’ own perception) there will be substitution into lower quality settings as a result of childcare becoming more expensive.

Previous academic work suggests the price effects of these types of regulations are large. Diana Thomas and Devon Gorry estimated that even the more modest requirement for lead teachers to have a high school diploma increases childcare prices by between 25 and 46 percent. Hotz and Xiao likewise find that increasing the average required years of education of center directors by one year reduces the number of child care centers in the average market by between 3.2% and 3.8%. This effect manifests itself overwhelmingly in low income areas, with quality improvements (proxied here by accreditation for the center) occurring in high-income areas.

In other words, the real trade off is not quality vs. cost, but better quality for those rich enough to still be able to use formal care vs. less accessibility to care and higher prices for the poor. And that means lower quality and fewer options for the least well off – widening, rather than narrowing, supposed educational inequalities. Given average annual full time infant care in DC already costs $23,000 plus per year, one would think the government would be sensitive to these concerns about affordability.