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I think getting bogged down in the merits of daycare is a dead end.

Not sure what the Liberals are thinking. From my point of view as someone with a 2 1/2 year old this is a non-issue. I don't want or need taxpayer supported institutional day care. But it would be great if the amazing lady (and those like her) who run the day homes earned a little more. It would perverse for me, who probably earns twice what she does, to get a taxpayer funded gift while she earns the same and her taxes go up to pay for my unneeded, unwanted gift.

I'd prefer to see a national policy focus on single parent and low income households where childcare can make a big difference - either by allowing both parents to work and thus bring in enough money to live decently, or by allowing a single parent to work and thus not be on welfare. The benefits of not being poor surely outstrip any negative effects of daycare.

Seems to me the whole idea of a daycare program for low-income individuals could be addressed with a GAI with a benefit for children based on their age. It might make more sense for low-income single parents to stay home and care for their two children than have them buy child care that costs (either them or the government) nearly all their income for the month. Maybe a supplement to this would be drop in centres where single mothers could bring their kids one day a week to give them a break from child care to run errands, etc. and give the child some enrichment that they might not be getting at home.

What I would like to know is why this is proported to be a federal responsibility. As Quebec showed if a province wants to get cheap childcare done (albeit backed by equalization money) it will do it.

(Also is it me or is WCI brutally slow today...?)

Really? Anyone else having problems?

None here.

Do we have experience with day care facilities that cater to shift workers?

If daycare is to fully enhance worker mobility, it must accommodate the realities of the workplace.

I think what this post and the discussion shows is that the policy goal we want to achieve with universal childcare is painfully unclear. Is it to increase the birth rate? Is it to increase labour force participation among single mothers? Is it to improve education outcomes? Is it to create jobs in the daycare sector?

I think before we can debate the merits of daycare and before the Liberals can try to sell it to the populous, someone has to come forward and make a case for what goal we're trying to meet with a childcare program.

This post and the comments have got me thinking about the economics of publicly provided childcare. Despite what critics of government might say, a lot of the things that governments do they actually do relatively efficiently. For example, to require everyone on my street to pay taxes to the city and tnen have one city truck sweep down and clear everyone's sidewalk in a couple of minutes is far more efficient than any kind of private alternative - contractors may have low costs, but they don't enjoy the economies of scale.

The economics of child care are quite different. The majority of child care outisde Quebec is home based. Much is in the cash/no receipts sector of the economy (it's not worth paying more to get a receipt unless the lower income parent faces a higher tax rate than the care giver, which happens relatively rarely). For those who want cadillac care, the domestic worker program is a ready source of cheap, highly educated competent workers (the nanny across the road is a teacher with a higher degree in math education). And there's no economies of scale in child care provision, unlike snow removal or teaching Econ 1000.

I don't know where I'm going with this. But there must be some kind of a calculation you could make that would say 'o.k., what's the cost/benefit of A: providing this service publicly?' 'what's the cost/benefit of B: giving the parent a voucher and allowing them to buy it privately?' 'what's the cost/benefit of C: doing nothing?'

Before you say a voucher is obviously the best choice, think of the admin costs (how do you ensure the money is actually spent on child care rather than just cashed out?). And if it's a low-administration no strings attached cash transfer, think of how you would target it, if at all? And how much it would have to be to be meaningful?

This is why I refuse point blank to supervise any student who wants to write a thesis on child care!

Even within the Quebec system, much (dunno percentage) is done in homes as well: many DGPs work out of their homes, with a maximum of 6 kids (including their own). This was (and probably still is) popular with both DCPs and parents, largely because it offered so much more flexibility for both parents and DCPs.

And your point about these things not scaling is important; it's not clear to what extent a centralised system is going to help.

AB has an accreditation and subsidy program for day homes:

http://www.child.alberta.ca/home/1173.cfm

It's certainly not perfect, but it seems to me to be a good start. Do other provinces have similar programs?

It is worthwhile to step back from the whole thing and ask what the argument is for having the government involved in a comprehensive program. If it's just a distributive justice concern (i.e. to promote the equality of women, redress poverty, or lighten the burden of single parenthood), then dealing with it through transfers, subsidies, vouchers, etc. is going to look fairly attractive (modulo the usual concerns about perverse incentives). It's not clear why government should be getting into the business in any big way.

So the question is whether there is any efficiency argument for government intervention in this sector. As Frances observes, it is far from obvious what this might be. Where's the market failure? Not a lot of positive externalities -- indeed, private benefit clearly outweighs public --, no major economies of scale,... no significant transaction costs.... What about information asymmetries? That's where I think there's mileage to be had.

Here's how the argument would go: daycare is subject to moderate market failure, resulting in chronic shortage of (licensed) positions. Why? Because of problems finding the right governance structure for firms. First of all, parents are uncomfortable with daycares operated for profit by standard business corporations. This is primarily due to information asymmetries -- there are thousands of unobservable ways that you can cut corners in a daycare, in order to make a bit more money. How often are toys cleaned? How much are the children fed, and what quality of food? How often are they changed? What is the staff turnover? etc. This is what leads to the popularity of daycare co-ops. But (consumer) co-ops are subject to their own, very significant difficulties. The major problem is that exit costs are close to zero, and parents know that they are only in the co-op for a fixed period of time. Thus they invest very little energy in maintaining the co-op, or getting involved in governance. (Unlike a condominium, say, where in order to get out you have to find someone else who wants in.) As a result, the preferred ownership structure for daycares -- it seems to me -- is that they be non-profit. This is why daycares attached to schools, or an employer, are popular (even when not strictly speaking non-profits, the way the services are contracted for means that they are often administered that way). But because of this, the usual financial incentives to create new daycares are absent, and so the initiative usually falls to the public and parapublic sector. That's why you need a government strategy.

Of course, this doesn't produce an argument for state provision either. It does, however, provide an argument for state involvement in the sector, in a sort of prodding and coordinating role, in order to ensure that supply is reasonable (and of course, a regulatory role, vis-a-vis the information asymmetries). And maybe cover some capital costs for non-profits -- typically you see daycares taking over distressed real estate, not putting up new buildings.

Anyhow, that's just the theory that I've be toying with (while pushing the stroller home), I'd be interested to know what people think. It occurred to me because I had to sign over a year in advance in order to get $60-a-day daycare in Toronto, just like all my friends in Montreal, jostling for spaces in the $7-a-day daycare.

I don't find Joe's explanation of market failure convincing. I don't see why people would have an inherent preference for non-private daycare. Private daycare firms wouldn't have much of an incentive to cut corners, since their reputation is important. A daycare that doesn't properly care for kids is going to get caught, and parents would pull their kids out and tell other parents not to go there. I think a lot of daycares in fact are for profit.

I don't think there is a market failure in daycare -- it's just that demand is high so it gets expensive.

David: how would you know they aren't properly caring for kids? Is your 2 year old going to tell you they're watering down the milk?

I'd guess the study that pointed out public daycares are better than an Auzzie-owned private supplier used some sort of test score metric. I'd dig up the link but our media focused on puffin poop last election rather than the tradeoffs of vouchers, public, private, competitive private...I mention the latter because as far as I know there is only one private daycare provider globally, a large Australian company. This debate can't happen until our media families and shareholders care about lower and working poor castes (it should be obvious from Green Shift attacks the future does not concern the Canada Club); quite frankly the media families are undeservedly rich, arrogant and stupid...this isn't a normative appraisal.

A recent study noted daycares function as community support centres for moms. The gain in mental health and family-surrogate atmosphere clinches daycare for me. If this blog were called worthwhile swedish or scottish initiative I'd link the study. I'd be curious how much better public is than private, than private-non-monopoly, than vouchers...but maybe the boomers have to get senile first before we stop being Calgarian and start being Canadian (again, not being normative, if you follow AB politics you understand my allusion).

For the record I'd love to see an AB Minister raise her children on a single income comprising minimum wage, or on no income or safety net at all, as some live...

This discussion appears to be taking place in a vacuum, same as when Conservative critics like Craig Oliver, Bob Fife, National Post editor etc..... in the media who attacked it when the Liberal Party revealed their program recently.
One of the most laughable comments was there is no need for Liberals to bring up this issue as the Tories have a ChildCare plan which is a annual bonus of $1,200 per child under six. How does this pathetic sum cover childcare costs is beyond my comprehension? Then there were false allegations that Liberals are not sincere about implementing this plan because they have never taken action, and the Liberals bring it up as their talking point.
If that is so, why does it scare the Conservatives so much? There is a big fear and it is not about just losing elections but something deeper than that. Like the fear it will uplift the lives of ordinary working Canadians and improve the Economy.

Is their memory retention under ten minutes, or just blatant twisting of facts

Provinces want Liberal child-care plan honoured

http://www.ctv.ca/servlet/ArticleNews/story/CTVNews/20060202/child_care_060202?s_name=&no_ads

Ontario's Minister of Children and Youth Services, Mary Anne Chambers, told reporters this week that cutting the $4.8-billion deal with the provinces will be "disastrous," adding she hopes the existing bilateral five-year agreement between her province and Ottawa will be honoured.

The plan was the product of 10 years of research and consultation, and focuses on early childhood development in government regulated day care centres.

Over the last year, the Liberal government signed full funding agreements with Ontario, Manitoba and Quebec, and agreements in principle with seven other provinces. The money was announced in the June budget and first-year funding was placed in a trust fund.

In his last speech as prime minister on Thursday, Paul Martin said he sees the child care program as one of his top accomplishments while in office and doesn't think Harper will be able to rally enough support to defeat it.

The Liberal ChildCare plan is going ahead, the academics would be more useful if they used their resources and acumen in

"(The) child care (program) is something that I wish we had been able to do ten years ago, but we didn't have the resources," Martin said. "I think they're going to find that that child care agreement is going to happen."

At Stephen Harper's first press conference as prime minister-designate on Jan. 26, he said the Conservative plan of giving parents taxable payments for children under six is one of the most popular parts of the party's platform.

His government also plans to give tax credits to employers and non-profits that create new spaces.

However, Quebec Premier Jean Charest has said he thinks the government must honour the agreements that have already been signed.

He said Quebecers would happily accept the Conservative payment on top of the promised child care funding, but not in its place.

Christine Melnick, Manitoba's Minister of Family Services and Housing, echoed that statement.


As reported this plan was the result of a ten year study. While there is no substitute for parents/grandparents raising children, daycare is the next best thing. Unless like in old days a traditional family could live on father's income, which is against the ideology of these critics.

Japan and Russia are taking measures in view of their falling birth rates. It is time the academics look ahead and anticipate the problems arising from low or falling birth rates or will it have to be purely by Immigration policy? It amazes me how non-chalant the Financial Industry Analysts in the West are Brazil default history, according to them there are no worries in investing there 'cause of their growing population. So something that Corporatists cheer for in other parts of the world as good for Economy, at the same time a measure to encourage birth rates at home is detrimental to the Economy at home.

Population is a Asset.


Canada's population is projected to continue to grow, peaking around 2040 in the 40 million range. If we want to stabilize at that level or to continue to grow, we need to either increase immigration or raise the birth rate, assuming no drastic changes in life expectancy (which could be quite an assumption).

Just want to point out that the language assertions are incorrect: childcare is not subjected to bill 101. Most childcare is actually bilingual in the Montreal region, which has led to a recent debate on whether or not it should be included in the law. Of course, nothing will happen as long as the Liberals are in power.

The announcement made by Finance Minister's tighter mortgage regulations is supported by the Vanier Institute of the Family's own research.

Serendipity! The institute had conducted a study which found a dramatic rise in household debt and late debt payments. This same institute's survey released in May 2005 had found that 90 percent (???) of Candians rank daycare centres as their fifth choice. Again what fortuitous timing, just when the Liberal govt was on its way within a year or so to present Canadians with their Childcare plan.

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