Lol.
Yes. The failure is treating child care like a market.
Is there a market failure in child care?
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Re: Is there a market failure in child care?
#12Markets are not oriented to solve problems for social and societal needs, that is supposed to be the government for the people's concern. If we as a society want this solved, and the government of the people for the people does not, this represents a failure of the social contract to be governed.
Re: Is there a market failure in child care?
#13You don't just take a punt on a childcare provider like you might with temporary accommodation on AirBnB.
From personal experience and those of other parents I know, it's a heavily researched, quite intensive process involving multiple visits to different providers.
An AirBnB for long-term childcare seems like a non-starter, perhaps beyond initial discovery and shallow research.
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Also, there are so many societal benefits to affordable child care for all. For example, more primary care givers returning to work, earning and therefore paying taxes etc.
Re: Is there a market failure in child care?
#14Market failure? The demand for child care is a social and economic failure. Stay-at-home parents are no longer feasible for most families.
Is the situation where stay at home parents, in a two parent household, being unfeasible a majority of the time a market failure?
Re: Is there a market failure in child care?
#15The failure to me seems in outsourcing your child to a daycare, vs parents having flexible schedules to actually take care of your kid (either 1 with PT job or staying home FT, or both with flexible jobs). I understand this isn't popular in our culture these days, but I imagine it has many positive outcomes for the child and family.
Parents never did this when both of them worked. Grandparents did this. Unfortunately, these days, parents can't afford to keep living near the grandparents (because home prices have gone up too much, or because the grandparents are in a dead-end no-jobs town). Your options are to fix the housing market (By which, I mean, utterly destroy the value of existing homes[1]), or to make it possible for a single breadwinner…
Also a lot of the grandparents are way older since they did college instead of kids at 20 thing. It makes a difference my parents are both close enough but other than 1 hour maybe a month is taxing for them to watch my demonspawn.
Re: Is there a market failure in child care?
#16The failure to me seems in outsourcing your child to a daycare, vs parents having flexible schedules to actually take care of your kid (either 1 with PT job or staying home FT, or both with flexible jobs). I understand this isn't popular in our culture these days, but I imagine it has many positive outcomes for the child and family.
Parents never did this when both of them worked. Grandparents did this. Unfortunately, these days, parents can't afford to keep living near the grandparents (because home prices have gone up too much, or because the grandparents are in a dead-end no-jobs town). Your options are to fix the housing market (By which, I mean, utterly destroy the value of existing homes[1]), or to make it possible for a single breadwinner…
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Re: Is there a market failure in child care?
#17The failure to me seems in outsourcing your child to a daycare, vs parents having flexible schedules to actually take care of your kid (either 1 with PT job or staying home FT, or both with flexible jobs). I understand this isn't popular in our culture these days, but I imagine it has many positive outcomes for the child and family.
It also has many positive outcomes for a kid to spend some time in a daycare with other kids its age, for some more so than others. Social capabilities, language capabilities, nourishment, ...
Re: Is there a market failure in child care?
#18A few thoughts:
1. Waitlists are a scam. In NYC, it's ~$150 non-refundable just to apply, and daycares won't tell you how long their waitlist is (and per the article, are often over subscribed). I wish there was legislation that these are refundable, or capped at ~$20 or so.
2. The cost of daycare here is around $2500/kid. So with two kids, you're looking at $60k/year, which is $100k pre-tax. And so if you have two kids, work, and make less than $100k/year it makes sense to stop working. And really, the real number is probably closer to $140k/year, since who would work to just break even on childcare and not see your kids?
Re: Is there a market failure in child care?
#19This is a classic case of Baumol's cost disease. There isn't really a way for productivity to increase in the child care sector, you're always going to need a similar ratio of workers to children, but those workers also need their wages to keep up with inflation. The way it plays out in the US is everyone loses: the employees are underpaid, the employers are low-margin, and it is still too expensive for families. Child care companies can't pay the workers a fair wage while remaining profitable and keeping prices low enough for families, so we end up in this awful equilibrium where it sucks for everyone.
Re: Is there a market failure in child care?
#20> Suppose that the parents have two children who need child care. That is $540 per week. The parent salary has to be at least $540 per week to make the choice of child care economical. But that does not take into account taxes.
Even worse than that, it doesn’t take into account commutes, and the opportunity cost of not spending time with your own kids. If you make just enough money at work to pay for childcare, what the heck are you doing?