#2 Universal Daycare = More Women Working & More Unhappy Children

In Quebec a universal daycare program went into effect in 1997. Charging parents $5 a day, and subsiding the daycare facilities led to more mothers going to work, but it seems to have had a detrimental impact on the children as they age. This 21 Century struggle of how to get women working and not negatively impact children has some new data to consider with this recent review. This program widely considered a great way to give people in poverty an opportunity rather than a handout is more nuanced than first realized.

All of which is to say that the Quebec day care program was not some kind of catastrophically mismanaged failure. Lots of people used it, the number of high-quality day care slots rose, and — as intended — it encouraged more mothers to work.

This is particularly important to dwell on because the induced work effect means the Quebec program achieved something like the holy grail of 21st-century welfare state policy — it significantly increased the incomes of economically struggling families without giving them additional cash assistance or transfer payments. Steeply discounted child care is valuable, but it’s also very much a hand up, not a hand out. To benefit economically from the program, Quebec’s parents needed to step up and earn a living for themselves. And they did. It just turns out to have had deleterious impacts on their children’s long-term well-being.

The Quebec day care story is part of a larger arc of research into the importance of “non-cognitive skills” — things like patience and perseverance that aren’t measured on standardized tests — which are crucial to long-term outcomes in life.

The American Head Start program, for example, has not been found to lift its graduates’ test scores as they work their way through the education system. But Pedro Carneiro and Rita Ginja have found that “participation in the program [also] reduces the incidence of behavioral problems, health problems, and obesity of male children at ages 12 and 13,” and the results stand up later in life, with analysis suggesting that Head Start “lowers depression and obesity among adolescents, and it reduces engagement in criminal activities and idleness for young adults.”

This is normally taken as a strong argument in favor of spending money on Head Start and similar preschool programs.

James Heckman’s famous studies of the intensive Perry Preschool Program find short-term cognitive benefits (i.e., higher test schools) that do phase out in later years, combined with enduring non-cognitive benefits that lead to higher earnings and reduced rates of involvement in crime.

What we’re learning from Quebec is that just as some early education programs can improve on non-cognitive skills, others can do the opposite.

At the same time, it turns out that low-quality child care isn’t just worse than high-quality child care. It’s worse than no child care.

This is a major dilemma for any effort to seriously increase public investment in the sector. The recent Center for American Progress proposal to create a national subsidized child care system, for example, differs from the Quebec model in a whole bunch of ways but is built around a similar notion that more money now will lead to more high-standards institutions later. CAP’s plan is that eventually only high-standards institutions will be eligible for subsidies, but it envisions a transition period so that parents can get help as soon as possible while the larger system takes time to adjust. Quebec is a reminder that the adjustment phase can take a long time and come at a major social price.

The United States has not seen fit to try to increase women’s labor force participation through the creation of a new entitlement program for child care. But we have done the opposite. The 1995 welfare reform bill and essentially all subsequent developments in American social policy have been based around the idea that unconditional cash welfare — money that would let parents get by without working — is a terrible idea and money should instead be invested in programs like the EITC that enhance the take-home pay of low-wage parents.

This is very different from the specific design of the Quebec program, but it’s inspired by a similar underlying vision — the idea that it’s better for a cash-strapped parent of a young child to put the kid in a bottom-end day care program and work a low-wage job than to get financial support from the government to stay home with the kid.

And it’s certainly true that this kind of work-promotion strategy is better for economic growth. Both the low-wage job and the low-end day care center count as part of GDP for the purpose of measuring “the economy,” whereas the labor done by full-time parents and homemakers does not. But from a social welfare perspective, the relevant issue isn’t whether child care is performed as market- or non-market labor — it’s whether it’s performed well. At some places, it is performed well. But at others, it isn’t. And programs that induce parents to be indiscriminate about child care quality — whether through the carrot of subsidized care or through the stick of benefit cutoffs — can have troubling consequences for children’s long-term well-being. By contrast, research into simple cash handouts to poor families pretty consistently shows positive impacts on children and family life. Politicians looking for a quick boost to GDP or to avoid the stigma of welfare will prefer to focus on child care, but the challenge of actually delivering quality better than what parents equipped with extra resources can figure out for themselves is extremely difficult.

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