Politics & Policy

Parents Want Help, Not Day Care

(Dmitriy Shironosov/Dreamstime)
Obama would help them pay for day care, but most want help raising their children at home.

During the State of the Union, President Obama made a strong case for increasing the tax credit for spending on day care: Having both parents work is an economic necessity for many middle-class and low-income families today, so we need more affordable, high-quality child-care options. And, indeed, everyone wants to help working families. Conservatives concerned about declining workforce participation and a growing dependency culture may find the president’s work-facilitating proposal particularly appealing.

But parents may react differently. As nice as affordable, high-quality child care sounds in the abstract, that’s not what most parents want for their own children. When the research firm Public Agenda asked parents of children under age five about the best child-care arrangement, 70 percent thought it was best for one parent to be at home. Just 6 percent thought a quality day-care center was optimal. More than seven in ten parents agreed with the statement “Parents should only rely on a day-care center when they have no other option.”

Parents’ actual behaviors confirm these stated preferences. According to the Census Bureau, in 2011, less than one quarter of children under age five were in an organized day-care facility, and just 13 percent were at day-care centers. About 60 percent of children under five spent some time in an alternative child-care arrangement, but most of that care was provided by a relative.

Of course, the lack of affordable, high-quality day-care centers may contribute to these outcomes and expressed preferences: Parents may welcome good day-care centers and express reluctance in surveys only because the day-care centers in their neighborhoods are too expensive, overcrowded, not high-quality, or all of the above.

Yet expanding the Child and Dependent Care Tax Credit, as the president proposes, is unlikely to solve that problem. An expanded, non-refundable tax credit won’t help those without a positive income-tax liability, and it may encourage child-care centers to raise prices to eat up the subsidy (a phenomenon that has helped drive college tuition through the roof). This could leave parents who qualify for the tax credit no better off and those who don’t qualify with bigger bills.

The best way to make child care more affordable and plentiful is to make the market more competitive and easier to enter for would-be child-care providers. Today, many government policies make running a child-care business more difficult and expensive than it needs to be. In addition to the normal costs of operating the business and obtaining adequate liability insurance, child-care centers must comply with often-stringent state regulations. States create rules for the maximum children-per-caregiver ratio, how much space must be available per child, and what day-care center facilities must include.

These regulations significantly impact costs for parents. As Jordan Weissman wrote in The Atlantic, “in Massachusetts, where child care centers must hire one teacher for every three infants, the price of care averaged more than $16,000 per year. In Mississippi, where centers must hire one teacher for every five infants, the price of care averaged less than $5,000.” Reducing unnecessarily burdensome regulations would allow more entrepreneurs to enter the child-care arena and ultimately lead to more affordable options and a greater diversity in the kind of care arrangements that are available.

Moreover, while bringing costs down is a worthy goal, costs aren’t the only reason most parents prefer alternatives to institutional day-care centers. Parents want their children cared for by someone — ideally, a relative – who loves them and is focused on their long-term best interests. Second-best to a loving relative is likely to be a friend or a known, local care provider who will form a lasting bond with the child. Big, formal day-care centers, even the good ones, seem less likely to offer this kind of consistent, loving care.

Rather than push parents toward their least-preferred child-care arrangement, policymakers ought to focus on providing tax relief to parents across the board. Although this runs counter to the important goal of simplifying the tax code, policymakers could explore targeting additional tax relief to parents of younger children (such as five and under), since they require the most hands-on care, which can preclude a parent from engaging in paid work.

Putting more resources in parents’ pockets would make it easier for them to follow their preferences, whether that’s paying a formal day-care provider or keeping a parent at home. Families that are making significant financial sacrifices to keep a parent at home because they believe that’s what’s best for their children can rightfully feel frustrated that policymakers seem to consistently overlook the value that they provide to their families and communities. Policymakers should take note that many working mothers wish they could work less and spend more time caring for their children themselves. Making it easier for them to achieve that goal should be just as important as helping them pay someone else to care for their children.

— Carrie Lukas is the managing director of the Independent Women’s Forum. 

Carrie Lukas is the president of the Independent Women’s Forum.

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