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Is there a market failure in child care?

arnoldkling.substack.com

41–50 of 127 posts

Re: Is there a market failure in child care?

#41

Earlier quoted context omitted.

> 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.

That's take home pay. With taxes it's much higher.

so based on empirical observations I am sure there are a number of people who are making barely enough to support the child care cost quoted in the post I quoted. maybe I misinterpreted the post I responded to

Re: Is there a market failure in child care?

#42
For anyone interested in the cost of child care and how broken the current systems are, there's been some great work happening in Texas to understand solutions which has been driven by research and feedback from childcare workers, childcare company owners, childcare advocacy groups, and parents: https://pn3policy.org/resources/workgroup-recommendations-to...

I'd recommend reading the linked briefs for a high level overview.

Re: Is there a market failure in child care?

#43
post #2

The 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.

This doesn't match my experience. We've got two young kids. Both went to daycare from an early age (6 months or so). It's been great for everyone. I think there's pretty significant upside to the kids to spending time both with other kids and also with multiple different caregivers. It's also great for us adults to have interests/activities/ambitions (like, a career) outside of the kids. Not saying there are no downsides, but overall we're very happy with the decision.

I'm not saying you're saying this, but there's this fallacy/myth out there that if you don't want to spend 24 hours a day (or all waking hours of the day) with your child and responsible for their well-being, then you're a bad parent or damaging them or something. It's possible to love your kids, enjoy spending time with them, be a great parent, and also find it exhausting or even untenable to be responsible for them all the time.

There's also this idea floating around that people used to raise kids with an extended network of adult caregivers, and that that was good for everyone. That resonates with me. For people who don't have family around to help, daycare has sort of taken that place, for better and worse. (Daycare providers are not faceless service providers -- they become close members of your extended community!) The downsides of this are widely talked about. But I know folks who've had loads of family help ... with significant associated emotional burden.

Re: Is there a market failure in child care?

#44
I live in one of those cities that regularly makes the best places to live lists. I’m not able to get a spot in a before or after school program for my children, regardless of price. The one child center that serves the school has already filled their slots for the fall.

Seems like this well educated, high income market is still organized around one parent not working full time or a grandparent living nearby.

Re: Is there a market failure in child care?

#45
The "market failure" is that daycare is a low-margin business that needs to service cash-strapped parents near where they live. The "market" that's been keeping wages stagnant while cost of living, especially cost of land, has been skyrocketing.

That policy wonks are laser-focused on the "market" is the problem. This is one aspect of the capitalism-fueled social collapse.

Re: Is there a market failure in child care?

#46

Earlier quoted context omitted.

> 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.

That's take home pay. With taxes it's much higher.

then you also need to factor in tax rebates for childcare, which won't cover 100% but it will lessen the impact

Re: Is there a market failure in child care?

#47

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…

> 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?

Career progression paths tend to yield highly backloaded payoff.

Re: Is there a market failure in child care?

#48
Costs are really out of control. My friends in a relatively low cost of living city (San Antonio, TX) are going to pay upwards of $1200/month for daycare for their soon to be 6 month old, once their family member providing childcare needs to return home. That's essentially an extra mortgage payment in this part of the state. There are also very long waiting lists, so long that my friends are encouraging families to get on waiting lists prior to conception!

This is all anecdotal, but I believe they did their research on this given their childcare needs.

Re: Is there a market failure in child care?

#49

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.

Consider what you're actually getting for the price difference and where the extra money goes. Probably most of it doesn't actually go to the employees, so are you sure that paying more makes any real difference?

Re: Is there a market failure in child care?

#50

Earlier quoted context omitted.

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

I don’t mean to say I want the illegal daycare outlawed. I’m sure the lady was fine. I just think it’s absurd that we expect daycare to be cheap when you are entrusting the most valuable thing in your entire life to strangers. People think this should be free?

> I just think it’s absurd that we expect daycare to be cheap when you are entrusting the most valuable thing in your entire life to strangers.

They aren't strangers if you take the time to get to know them, and their current customer families, beforehand.

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