The senator’s proposal would heavily subsidize parents’ least favorite care option — day care — while doing nothing to make all the others more affordable.
Senator Elizabeth Warren is poised to propose a sweeping new government program to expand taxpayer support for child care, along with new government oversight meant to ensure that all day-care providers are “quality.” HuffPost reports that, under Warren’s plan, the government would cover all child-care costs for families with household incomes below $50,000 and no family would spend more than 7 percent of income on child care.
This may sound appealing to those concerned about families with young children struggling to make ends meet, but it could backfire on many families who prefer family-based care.
Support for massive new government day-care subsidies relies on some faulty assumptions about what American families want when it comes to caring for their children. Foremost, it assumes that most Americans want their children to attend day-care centers, when in fact, most parents would prefer to be able to care for their children themselves or rely on family-based care or the closest approximation to it.
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It also assumes that quality child-care centers are associated with positive educational and life outcomes for children. As Steven Rhoads and I detailed in a piece for National Affairs, much research points in the opposite direction. Studies that show benefits associated with day-care attendance tend to be unrepresentative and record gains only for the most disadvantaged populations, while studies that look broadly at the impact of day care on the general student population show much more discouraging results.
In any case, it is undeniable that day-care is more expensive than it needs to be. Ironically, one reason for its high costs is government regulation. Economists for Mercatus conducted an analysis of how regulations impact day-care costs and quality and found that:
. . . regulations intended to improve the quality of child care often focus on easily observable measures, such as group sizes or child-staff ratios, that do not necessarily affect the quality of care but do increase the cost of care. These regulations can have unintended consequences, including increasing the cost of child care while decreasing the wages of child-care workers.
The authors went on to explain the obvious implication of their findings:
Eliminating regulatory standards that do not affect the quality of care while focusing on those that do, such as teacher training, will improve the quality of child care while making it more affordable to low-income families.
Senator Warren should keep this in mind. While there may be some sensible regulations, government has a poor record of creating the type of environment that parents instinctively know is most important for their children: somewhere they are safe, treated with compassion and patience, and encouraged to play and explore. But regulations are all but certain to make child care much more expensive, whether for parents or for taxpayers.
Many may be tempted to applaud Senator Warren for trying to help ease the pressure on parents with young children, who face big expenses and often struggle to get by. But Warren’s approach would heavily subsidize the one child-care choice that most parents say they prefer least — day-care centers — over others, such as sacrificing income to keep a parent at home or having a grandparent or other family or community member care for children. It would be far better to focus on making life more affordable for all families, by reforming tax and regulatory policies that drive up the cost of living and make it more difficult to live on one income, than to layer on another costly government subsidy that only helps some.