Universal Child Care: Crucial Benefit or a Fiscal Boondoggle?

For many American parents, the cost of child care is a constant struggle. Is universal child care the right solution for families?

October 27, 2019

Child care in the U.S. is wildly expensive – costs are up 65 percent compared to the early 1980s. In fact, research from 2018 found that in 28 states, child care costs more than college.

The federal government considers child care affordable if it costs a family seven percent or less of its income. By this standard, care is unaffordable in every state and the District of Columbia. In 2018, the price tag for day care centers averaged between $9,000 and $9,600 annually for one child, and ranged dramatically among states: $5,307 in Mississippi and $20,415 in Massachusetts.

In one survey, nearly 60 percent of Americans said that the cost of day care and preschool puts a somewhat or very significant strain on their household budgets. It’s this stress that Senator and former presidential candidate Elizabeth Warren tapped into when she talking about her plan for universal child care.

What exactly might universal child care look like, and what do the experts say about it?

The Warren Plan
During her presidential campaign, Senator Warren proposed a network of government-funded child care centers, paid for by a wealth tax on households that have more than $50 million in assets. The centers would adhere to quality standards based on those for existing federal programs, like Head Start. For families earning less than 200 percent of the federal poverty level, care at these centers would be free. Other families would pay according to a sliding scale, with no one paying more than seven percent of their income.

The proposal had fans. The financial services company Moody’s, for example, said the plan would stimulate economic growth and create jobs. And an analysis by the Center for American Progress, a left-leaning think tank, found that poor and lower-middle-class parents would benefit.

The proposal also had detractors. Reihan Salam of the right-leaning Manhattan Institute argued that “Instead of just helping working families, her [Warren’s] proposal risks increasing the federal deficit, driving up the cost of child care, and squeezing stay-at-home parents.” High-income parents who are already paying a lot for child care would have no incentive to shop around, he says, and centers would have no incentive to contain their costs.

Two Case Studies
A number of places around the world have some form of universal child care, including Finland and the Canadian province of Quebec. In Finland, all children under age seven have the right to child care and preschool, and almost all between the ages of three and seven are enrolled in some type of program. The programs are high-quality (child care providers have bachelor’s degrees), heavily subsidized, and available to everyone. Experts say this is one of the reasons that Finland has some of the strongest educational outcomes in the world.

Things look somewhat different in Quebec, which introduced a universal child care program in 1997. The program has had some successes: it tripled the number of high-quality day care slots – from 77,000 to 230,000 – and significantly increased workforce participation among mothers with young children.

But it has also had failures. According to one analysis, there was “a significant worsening in self-reported health and in life satisfaction among teens” and a “sharp and contemporaneous increase in criminal behavior among the cohorts exposed to the Quebec program, relative to their peers in other provinces.”

Why? In order to meet demand, the system in Quebec ended up relying heavily on home-based care, which is more loosely regulated and often lower in quality. Vox concludes that “low-quality child care isn’t just worse than high-quality child care. It’s worse than no child care.” Research on the Quebec initiative suggests that any expansion of child care should focus not just on the quantity of affordable slots, but on the quality of the centers themselves.

Other Approaches
Several proposals would expand the Child Tax Credit, which currently provides some support to working families with children. One proposal would transform it into a universal child allowance, which most industrialized nations already offer, while another would adjust it to benefit more low-income families.

Experts say that expensive and inaccessible child care has many negative consequences, including lost productivity for employers and lost wages for workers. They also note that when parents can further their education and participate in the workforce, their families are better off financially, which has a positive impact on children’s well-being. With companies, politicians, and academics all searching for solutions, one thing is clear: high-quality, affordable child care is a major pain point for American families.

Learn More

State by State: This interactive online tool breaks down the cost of child care, how many families can afford it, and how it compares to college and housing costs in each state – via Economic Policy Institute

Family Last: One writer argues that Senator Warren’s universal child care plan would weaken family relationships by pushing more children into formal day care – via National Review

A Global Perspective: Many countries offer publicly run or subsidized child care. Three mothers in Sweden, Canada, and France discuss the systems where they live and their experience with them – via Elle

In Conversation: The hosts of “The Weeds” podcast dive into universal child care and other policy approaches that might provide Americans with more options – via Vox

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This article originally appeared in the October 27, 2019 issue of Wide Angle, our regular newsletter designed, we hope, to inform rather than inflame. We make a special effort to cover good work being done to bridge political divides, and to offer constructive information on ways our readers can engage in the political process and make a difference on issues that matter to them.

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