Is there a market failure in child care? • Hacker News Board

Re: Is there a market failure in child care?

#61

Post by harryf » Wed, Feb 22, 2023, 5:14 PM UTC

Eumenes wrote: 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.

With all due respect, you sound like someone who doesn't have children. Most of the argumentation for "parents should stay at home and care for their kids" is based a different world to the one we now live in - a throwback to times where we lived in small communities and child raising was more a group effort with grandparents and relatives helping out.

Today 56% of the worlds population lives in cities. That means childcare is essential for socialising a child.

A child at home with a parent until kindergarten is probably going to spend the first 4 years of their life in a small apartment with one adult, bearing in mind that many young parents are generally not well off. This is not healthy situation for the child or the adult.

Re: Is there a market failure in child care?

#62

Post by ilikerashers » Wed, Feb 22, 2023, 5:14 PM UTC

ch4s3 wrote: post #23

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?

The government can step in to fund areas that shouldn't be a free-for-all market. Parents struggling to pay for childcare is the government saying a parent's job is to stay at home if they can't cover childcare.

It's a big issue in the UK and likely to be key in the next election as prices have gone sky-high.

Re: Is there a market failure in child care?

#63

Post by creaturemachine » Wed, Feb 22, 2023, 5:15 PM UTC

anonymouskimmer wrote: post #40

notch898a wrote: post #21

Earlier quoted context omitted.

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.

When I was a child my daycare was the house of a person who lived in the neighborhood. I wonder how much this sort of thing is regulated away now.

They can regulate all they want, this is still a popular and often necessary option.

Re: Is there a market failure in child care?

#64

Post by em500 » Wed, Feb 22, 2023, 5:15 PM UTC

notch898a wrote: post #21

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.

There are also a number of people who will never admit this on a public forum, but they prefer their paid job over watching their own children all day, sometimes even if it pays less.

Re: Is there a market failure in child care?

#65

Post by falcolas » Wed, Feb 22, 2023, 5:15 PM UTC

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?

Probably mitigating the cost of family health care between two earners (US centric, of course).

Re: Is there a market failure in child care?

#66

Post by alocasia-1 » Wed, Feb 22, 2023, 5:15 PM UTC

xyzelement wrote: post #54

alocasia-1 wrote: post #35

Earlier quoted context omitted.

I know you're being rhetorical, but often, just trying to avoid a gap in your resume. It sucks but there can be a greater long-term cost to trying to reenter the workforce after taking years off to raise kids.

I am just curious, is this a hypothetical or do you know of many people who actually made the explicit choice to break even working, just to have continuity of resume? It smells a little like BS to me, both because it seems to be often repeated (so sounds like a talking point) but I can't imagine any parents I know to actually decide this way

I've worked with a couple of folks that have said this exact thing, yes. One was a lab tech and I'm pretty sure she was less-than-breaking-even with putting her two kids in daycare. So yeah, it's definitely a real thing.

Re: Is there a market failure in child care?

#67

Post by anonymouskimmer » Wed, Feb 22, 2023, 5:15 PM UTC

ch4s3 wrote: post #23

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?

I would guess that some people are disagreeing that this particular service is seen by most purchasers of it as a commodity.

Others are probably disagreeing because they're conflating "market" with "free market", and this sort of service has a bunch of constraints from all sides.

Re: Is there a market failure in child care?

#68

Post by anonporridge » Wed, Feb 22, 2023, 5:16 PM UTC

billconan wrote: post #28

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 reimbursement…

This doesn't lower the costs, it just causes all taxpayers, including childfree adults, families with a stay at home parent, and families with older children, to subsidize the cost of childcare for those families where all adults are working full time. You could even hypothesize that this extra tax burden ends up being enough to force some stay at home parents get a job and put their children in childcare, creating a vicious cycle.

That's not obviously bad, but we should talk clear eyed about whether that's the right social contract to enter.

Re: Is there a market failure in child care?

#69

Post by lawlesst » Wed, Feb 22, 2023, 5:16 PM UTC

denimnerd42 wrote: post #31

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…

I think people do work to break even or even worse. You only need childcare for 4 or 5 years until the kid is old enough to go to public kindergarten. If you are 25 and take a break from the workforce for 5 years you are going to obliterate your career. meanwhile if you had been working at say 25 in NYC at 100k/year and kept working w/ the support of childcare then by 30 you could be making 150 or 200k/year. If you h…

The hours of a public school day are generally about two hours shorter than the average workday, not accounting for commuting time. There is still a need for before and/or after school care for several years after after the child enrolls in school.

Re: Is there a market failure in child care?

#70

Post by anonymouskimmer » Wed, Feb 22, 2023, 5:18 PM UTC

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…

> Baumol's cost disease.

I don't think wages in the childcare industry are increasing noticeable relative to wages in other sectors. As a person mentioned elsewhere, other factors such as rental prices and insurance probably add more to the cost than wages.