Government-funded Childcare Policy Analysis

Original "Essay"


For some reason, I can always think of things to post on Facebook when I am about to go to sleep, but can't remember what they are when I sit down at my computer.

Instead you get a sort-of analysis of a government policy I don't understand. (Politicians have been sending out leaflets again) Today's issue is subsidized child care spaces.

The negatives are pretty standard:
  1. It costs taxpayers money. Quite a lot of money. So if we didn't have them, we could cut taxes, or run more other programs, or pay down the debt or something like that. I don't think anyone would object to those.
  2. It results in children spending a lot of time when they are young and impressionable under government control. Assuming the government has some say in who takes care of the children, this would probably result in reduced diversity of opinion. That's bad for democracy. Also, you might get people refusing to use the program because of the ideals being taught, but they would still have to pay for it. There is also the question of how you decide which ideals people ought to be made to follow.

In truth, though, neither of these is particularly compelling on its own. The first applies to most government programs, and the second is a bit incoherent.

A better question would be why so many people want this program, and, given the costs identified, is it worth it? Here is where I run into trouble: I can't figure the reason people want this program, and without knowing that I can't answer either of the questions. But it seems there must be one, given ow many people want it. They wouldn't want to just pay for nothing. Some possibilities I thought of were:
  1. This is a program to give women more economic freedom. We are reducing the incentive for women to stay home and take care of children. This allows them to go out and get jobs and achieve their life goals. The problem with this is that many women like being homemakers, and for good reason. You get flexible working hours, can spend lots of time with your children (if you have any), the only deadlines are the ones you impose yourself, and you rarely have to deal with angry people with unreasonable demands. I suppose contractors and such could be angry, but someone would have to deal with them anyway. It's also lower-stress than being an entrepreneur, because you don't have to worry about finding business opportunities and going bankrupt if you don't. Also note that we had to raise taxes to pay for the child care program, so women who don't use it (e.g. because they have no children) have less economic freedom.
  2. This is a poverty-reduction program branded so as to avoid the dreaded W-word (welfare). The target demographic is single mothers who need all the help they can get. Unfortunately, this is an extremely inefficient way to do this. Spots don't just also go to the well-off -- they go disproportionally to the well-off. If we want to help single mothers, this is a terrible way to do it.
  3. Children provide a great benefit to the country (because they grow into adults). but a major cost to the people who raise them. Therefore the government should subsidize them. The issue here is that this is an inefficient subsidy. Parents miss the benefit when their children are too young or too old, or if they aren't in the program. There has to be a who bureaucracy to manage it, and they need to be paid. And there is a much simpler solution: just give the money to parents directly.
  4. This is a program to provide employment for low-skilled women. It actually does that, so I guess it works. However, politicians never brag about how many jobs the program created, only how many children are in it. Therefore, it seems to me this can only be an accidental benefit. The same applies to creating new government jobs.
  5. The program is a classic example of rent-seeking. The people currently employed taking care of the children put political pressure on the government to keep it going so they can keep their jobs. There are two problems here. Firstly, those jobs don't pay well, so I doubt the employees have the money they would need for the scheme. And secondly, this only provides a reason for keeping the existing spots open, not for adding more. Yet some political party promises more child care spots in very election, so that can't be it.
  6. Parents with children are just trying to get money from the government. They want a spot, so they vote in as many as possible in hopes of getting one. The problem here is that probability shows this is a bad way to go about it. Only people who have suitable children (or will soon have) benefit, so the other voters would be against it. As well, it would be more efficient to cut the government and its costly bureaucracy out of the loop and replace it with private businesses. Running it through the government increases the average cost (including taxes to pay for the program) because the bureaucrats also need to be payed. Its like a lottery: a few people win, but on average you lose.
  7. The media created the whole issue so they would have something to talk about. No. Just No. This is somewhere beyond the believability threshold. Besides, couldn't they think of something more interesting?
  8. Children put in child care develop better than those raised by harried parents who don't have time for them. They especially benefit from the social interaction with other children. I don't think the evidence supports this. If anything, it's the other way.

I seem to be stuck here, so if anyone knows the answer, I would appreciate you telling me.

I also don't know why I spent most of the afternoon writing such a pointless post, but I doubt anyone else knows that.


I got the following useful response:
I believe it is roughly the first two, i.e., the goal is to make it easier to work and raise children at the same time. The target would be single parents or families which feel they need two working parents to provide a second source of income. The reasoning is probably not that it is a more efficient way of helping people than cash transfers, but that it selectively targets the class of people who are struggling to find enough money to support children. Also I imagine that by directly addressing a problem that people find frustrating ("I want to start working so we can have more money, but then we'd have to *spend* more money to pay for childcare") the policy is able to gain more support and possibly votes.

I suppose another positive (?) argument that you could make is that it is more efficient to have groups of children raised in daycare while parents work, thus creating more total labour and growing the economy. This seems like a pretty horrible reason to do things though, and I don't imagine it is the goal that supporters of the policy have in mind.

Your [positive] point P8 could possibly become [negative] N3... probably children are usually better off being raised by their parents, and the existence of this policy could alter incentives to make it less feasible to do so.

A Follow-Up


Vaguely recently, I made post trying to figure out why government-subsidized childcare was so popular in political platforms. At the time, I didn't have a good answer. Now I think I do.

The secret is that this is not really a social justice program. It is a program to increase the birth rate disguised as a social-justice program. The hope is that if they reduce the time and money cost of having children, more people will have them. So far, so good.

The obvious next question is why this program. Economics, for example, says that it would be more efficient just to give parents money (we would call it tax breaks for marketing reasons). The problem there is that most of the money goes to people who have children already, which, considering the goal, is a waste. However, if they only make it available to working women (who on average have fewer children), more of the benefit goes to people who wouldn't have had children otherwise. We have an unfair program because it gives them more bang for their buck.


I got the following response:
Yep... If we could farm children, everything would be fixed. Wait a second, I think i remember hearing about some huge, astronomical number of abortions that happen every year. If we stopped abortions, perhaps Canada might have a population increase? And since parents are not really raising thier children anyways (the educational system already is), then we can just open daycares with dorms... And the parents can come visit thier offspring on the weekend, and the finances will come from less medical costs as well as less "poor spending" from bad parents. The huge increase in the tax payers within 15 years, as well as CPP and retirement investors, will be worth the short term investment - and our worth as a country in educational quality will skyrocket as these children will be surrounded 24/7/365 for 15-30 years straight! Problem solved. 😛 I am both joking and being completely serious.

There was more discussion, but it don't go anywhere interesting.

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