Wednesday, February 20, 2019

Think Of The Subsidies

Who pays for the kids?
Childcare is expensive. Nationwide it averages around $10,000 per child, and runs as high as $20,000 per child in Warren’s home state of Massachusetts. The idea that the subsidies—a family of four with $85,000 of income would receive subsidies worth more than $14,000—would not draw families away from the home and into the centers is implausible.

The marketing campaign for the Warrens would also likely draw families away from home care. In promoting the program, Senator Warren has been touting the alleged benefits of out-of-home childcare, although the social science on this is far more uncertain than she lets on. It’s very likely that families will feel increased social pressure to enroll children—for the sake of the children. We’ve already seen this in areas that offer free pre-school.

It’s very likely that instead of the number of children in childcare centers rising from 6.8 million to 12 million—as Warren’s economists predict–the number would likely be quite a bit higher.

But even if they are right about the number of children enrolled in the program, their math still does not add up. With 12 million children at $14,500 per head, the program would cost $174 billion—more than $100 billion more than what Zandi and Koropeckyj estimate.
How much is your kid's care worth?

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