Both Mr. Trump and Mrs. Clinton want to lower the cost and, presumably, increase the amount of child care. A quick economics quiz: What is the policy change that would have the greatest such effect?
I hope you answered: legal immigration of child care workers! And remove the large number of restrictions on providing child care.
In Specialization and Trade, I claim that public policy ends up subsidizing demand and restricting supply, which is almost always incoherent from the standpoint of traditional public goods. Usually, it is the suppliers of the good or service who push for such policies. However, the child care industry does not, as far as I know, have a formidable lobbying presence. Thus, I am inclined to bet that child care subsidies will not get very far in Congress.
The idea that there is a shortage of child care workers is a joke. Go on care.com, there is a vast imbalance between child care supply and demand. If you are not young, clean cut and college educated, you will probably not get any jobs. Far more women want to supply child care than there are available opportunities. Anybody who runs a nanny agency will tell you the same thing. What Cochrane wants are nannies working at third world wages, not more supply of nannies, of which there is more than enough.
It seems to me that a Voluntary National Service which includes “child care services”, to allow current welfare recipients to be trained how to take care of children and then get hired out to do the caring, would be a direct gov’t increase in supply.
Fed gov’t renting of current church & charity & local gov’t school unused rooms would increase the supply of child care places. Dedicating a corner/ reception room to child care might be very popular in existing elderly nursing homes, for some of the elderly – this might be a good market differentiator between homes.
Child care vouchers to all parents, to allow them to pay for child care, would be a welfare benefit that would increase paid-for child care. I’d support such vouchers, to demonstrate the benefits of vouchers and hopefully increase the support for school vouchers, too.
As noted, there are plenty of people willing to take care of children, but perhaps not so many at minimum wage (I’m not really sure of the wages requested), and possibly not for the times and locations desired by poor mothers.
There is always the Libertarian issue about suggesting how to optimize the gov’t subsidy, if there is one, while opposing subsidies in general, or possibly even in the particular case.
I’m now at the point of feeling there WILL be some gov’t programs to help poor, irresponsible people raise children. So I’ve evolved towards wanting to make the gov’t programs most supportive of market / voluntary principles, when possible. Especially to help determine the “unable” for whom it’s fine to do more, from the “unwilling”, from whom more behavior modification should be encouraged.
“It seems to me that a Voluntary National Service which includes “child care services”, to allow current welfare recipients to be trained how to take care of children and then get hired out to do the caring, would be a direct gov’t increase in supply”
How many people with kids do you know?
The politician proposing the “Give your kids to welfare recipients” program would have a short career.
The traditional answer is to put ~50% of the workforce into childcare; or, if you consider adolescents to be children and thus apprenticeships to be childcare, to put well over 50% of the workforce into childcare.
Increased immigration means:
1) More welfare recipients
Which have to be payed for by taxing working mothers, forcing them to work more, forcing them to need more child care…
2) More and more of our cities becoming slums
Meaning less available real estate within commuting distance of good jobs, meaning higher rent, meaning young yuppies that haven’t bought property yet working more to pay the rent, meaning they need more child care…
Or you could just restrict immigration and give strong incentives for people to care for their own children. You’ll note right away that self provided child care is untaxed! Homeschooling as well! Libertarian friendly solutions right there.
Or how about one giant race to the bottom where women spend their day filling out TPS reports in cubicles so they can pay some third world peasant with bad english to raise their kids in some overcrowded daycare facility. Let’s import more people so the daycare facility can pay lower wages so they qualify for more benefits payed for by the taxes of the working mother. Great cycle.
It won’t go anywhere in the near term. Democrats are fully committed to government run child-care facilities with unionized employees, Republicans are fully opposed to it.
However, Democrats will eventually win this one.
Au pairs are a great bargain, lots of people use them, they are nearly all foreigners on temporary visa, and they get tax advantaged treatment of room and board vs native workers.
You want to increase the supply, simply make the wages non-taxable, both income and payroll. As BenK pointed out above, we use about 50% of the potential work force through part of a life cycle to care for children. Given that, it seems odd to me to tax 3rd party child care at all.