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Is there a market failure in child care?

arnoldkling.substack.com

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Re: Is there a market failure in child care?

#21

Post by notch898a »

mindvirus wrote: post #18

A 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 k…

There are a number of people who will never admit this on a public forum, but they are taking their kid to some illegal immigrant in the ghetto and paying 1/3 of that.

Re: Is there a market failure in child care?

#22

Post by kenmorechalfant »

mfer wrote: post #14
cld8483 wrote: post #6

Market 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?

Without a doubt in my mind.

Re: Is there a market failure in child care?

#23

Post by ch4s3 »

burneraccountt wrote: post #11

Lol. Yes. The failure is treating child care like a market.

Is it not a service that can be provided by someone outside of the immediate family? Should those caregivers not be paid? If yes to both, that is a market. If you provide it as an entitlement, you still need some mechanism to know how many (coarsely put) units of child care to produce.

[*edit] for the down-voters, I'm curious what is your disagreement here?

Re: Is there a market failure in child care?

#24

Post by Rafuino »

blactuary wrote: post #19

This 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. Chi…

Sounds like it's an industry that should be provided as a public service then (or at least subsidized), not something that a free market can sustain.

https://www.nytimes.com/2021/10/06/upshot/child-care-biden.h...

Re: Is there a market failure in child care?

#25

Post by monero-xmr »

We paid a lot of money for childcare when there was a (possibly illegal) daycare a few apartments down with a lady watching a bunch of kids. She only wanted $500 a month but we paid $2000 to an expensive one.

Imagine advocating for cut rate care for your own children. Considering I’m leaving my most priceless thing with strangers it isn’t crazy to me that it’s expensive.

Re: Is there a market failure in child care?

#26

Post by wins32767 »

notch898a wrote: post #7
vkou wrote: post #3

Earlier quoted context omitted.

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…

Grandparents are now paid out via violence against the children (aka taxes) once they grow up. Why would they participate in raising the kid when the unspoken quid-pro-quo is no longer present and their benefits are guaranteed? There used to be significant bilateral benefit.

I guess that's the state of the world today, where actual violence is rare enough that people start calling things that don't cause any bodily harm with the same term.

Re: Is there a market failure in child care?

#27

Post by mitchellst »

adam-_- wrote: post #13

You 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. --- Also, there are so many societal b…

Yeah my first thought reading this was… does this dude have kids? Because this isn’t how the parents I know think of it, and not how I think of it.

But I also have income that gives me choices— the option I chose is “employ a full time nanny.”

Curious if he is closer to right than we are.

Re: Is there a market failure in child care?

#28

Post by billconan »

While I don't have children of my own, my ex-girlfriend used to manage a daycare center. The fees charged to parents were quite high, while the salaries of the teachers, including my girlfriend's, were surprisingly low. It appeared that the primary expense was the cost of renting the property. In my opinion, the government should provide financial support to these facilities, particularly in the form of reimbursements for education infrastructures.

Re: Is there a market failure in child care?

#29

Post by notch898a »

monero-xmr wrote: post #25

We paid a lot of money for childcare when there was a (possibly illegal) daycare a few apartments down with a lady watching a bunch of kids. She only wanted $500 a month but we paid $2000 to an expensive one. Imagine advocating for cut rate care for your own children . Considering I’m leaving my most priceless thing with strangers it isn’t crazy to me that it’s expensive.

A significant part of what you were paying out is liability insurance etc and not necessarily better care.

Re: Is there a market failure in child care?

#30

Post by texaslonghorn5 »

kube-system wrote: post #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…

> If you make just enough money at work to pay for childcare, what the heck are you doing?

$540/40hrs = $13.5/hr. Any number of jobs pay this little.

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