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> Economically we are far better off with children in care and parents in the work force Any data to support that? Given that there is a deadweight economic lo

> Economically we are far better off with children in care and parents in the work force Any data to support that? Given that there is a deadweight economic loss due to taxes, if both parents work and the income from the second parent doesn’t exceed the cost of child care + taxes, it would seem that in many cases, two parents working could actually be a net loss for the economy as the family might have less disposable income than if just one parent worked. A family with two kids could very easily spend $50k per year on child care. So the other parent would have to make $50k just to break even before the taxes. The second parent could very easily have to make $80k just to cover child care plus the loss from taxes since that second income is taxed as part of the overall household income. Kids with stay at home parents have higher school performance, which has an economic impact as well. https://www.gsb.stanford.edu/insights/eric-bettinger-why-stay-home-parents-are-good-older-children https://www.gsb.stanford.edu/insights/eric-bettinger-why-sta...

xupybd 8y ago
You're correct, I should have phased that something along the lines of. It is assumed that having both parents in the workforce should produce better economic outcomes. I also agree that there may be a negative net effect on the economy. But I have no idea if there is evidence for this and think it would be very hard to accurately research this given the number of other variables you'd have to account for. There is some evidence that there are economic benefits to women entering the workforce. https://onlinelibrary.wiley.com/doi/full/10.1111/jors.12336 https://onlinelibrary.wiley.com/doi/full/10.1111/jors.12336
- Spooky23 8y ago
  There are economic benefits to women and families. I think it’s fairly sensible to propose that the doubling of the supply of workforce has impacted the price paid for labor. The old fashioned troops and notions that hurt women in the workforce hurt men outside of the workforce. Guys with wives who make more get a lot of grief. When problems happen, it’s nearly impossible for working age men or couples to get safety net benefits.
flukus 8y ago
Take away the dollar figures and it makes sense, 1 person caring for 8 or so children (child care) should be much more efficient than 1 person looking after 1/2/3 children (normal for home care). That this efficiency ends up lining someone else's pockets would be a separate issue.
- mattnewport 8y ago
  This ignores a large number of factors. To look at it like an economist, if your hypothesis is true, what is the market failure that requires subsidies for child care in order to obtain this hypothesised greater efficiency?
  - flukus 8y ago
    > what is the market failure that requires subsidies for child care in order to obtain this hypothesised greater efficiency? I'm guessing that varies, but around here the main ones seem to be demand outstripping supply due to setup costs (expensive real estate), lack of trained workers, rapidly growing population (child care doesn't get much lead time from census data) and regulation (parents can't operate their own systems). There are plenty of market failures here when it comes to childcare.
    - mattnewport 8y ago
      The price of something being higher than you'd prefer does not mean there is a market failure. Child care is not a public good and there are not obvious externalities. Excessive regulation might be a factor but that is not market failure. The fact that the unsubsidized cost of child care is higher than some parents are willing to pay may just be evidence that there are no efficiencies to be gained for those parents. Perhaps the economies of scale for child care are less than you assume.
      - omegaworks 8y ago
        You're computing the value of a parent's career as a single point in time salary value, and not as a integration under the curve of salary earned over time. A parent may not have the cash reserves at that single point in time to pay for childcare out of pocket, that doesn't mean that the value they get from staying employed over time does not exceed that cost. Leaving the workforce starts you over at zero. Universal childcare, especially in the earliest stages of life, provides societal externalities that vastly outweigh the cost of providing it. It ought to be a public good.
xenadu02 8y ago
Taking time off from your career puts you behind your peers. That's no surprise. If women take time off to raise young children that hurts their long-term earnings. Again, no surprise. If we want to frame it in purely economic terms vis-a-vis government: Does the long-term increase in taxes paid by working mothers cover or exceed government outlays to provide childcare, especially in the early pre-K4 years? Secondarily is there any negative effect on the children and if so can those effects be mitigated? The study seems to indicate it is a net-win for the government because high-cost childcare only happens for 1-3 years but the earning power increase lasts the rest of a woman's career. I presume rational government policy would attempt to make free childcare tax neutral in this case. In alternative terms you could see this as the government making a short-term (3 year) loan to cover childcare while being paid back in the form of higher taxes paid by the beneficiaries over the next 20-30 years. Whether this makes sense for an individual couple is another matter. Whether the government should encourage new daycares or people to train as childcare providers is also another matter that bears some similarities to the universal healthcare arguments (eg that the government would want to encourage more people to train as doctors and nurses since the expected demand for services would increase, though true believers in the free market should expect the market to take care of such problems).

xupybd 8y ago

You're correct, I should have phased that something along the lines of. It is assumed that having both parents in the workforce should produce better economic outcomes. I also agree that there may be a negative net effect on the economy. But I have no idea if there is evidence for this and think it would be very hard to accurately research this given the number of other variables you'd have to account for. There is some evidence that there are economic benefits to women entering the workforce. https://onlinelibrary.wiley.com/doi/full/10.1111/jors.12336 https://onlinelibrary.wiley.com/doi/full/10.1111/jors.12336

Spooky23 8y ago
There are economic benefits to women and families. I think it’s fairly sensible to propose that the doubling of the supply of workforce has impacted the price paid for labor. The old fashioned troops and notions that hurt women in the workforce hurt men outside of the workforce. Guys with wives who make more get a lot of grief. When problems happen, it’s nearly impossible for working age men or couples to get safety net benefits.

flukus 8y ago

Take away the dollar figures and it makes sense, 1 person caring for 8 or so children (child care) should be much more efficient than 1 person looking after 1/2/3 children (normal for home care). That this efficiency ends up lining someone else's pockets would be a separate issue.

mattnewport 8y ago
This ignores a large number of factors. To look at it like an economist, if your hypothesis is true, what is the market failure that requires subsidies for child care in order to obtain this hypothesised greater efficiency?
- flukus 8y ago
  > what is the market failure that requires subsidies for child care in order to obtain this hypothesised greater efficiency? I'm guessing that varies, but around here the main ones seem to be demand outstripping supply due to setup costs (expensive real estate), lack of trained workers, rapidly growing population (child care doesn't get much lead time from census data) and regulation (parents can't operate their own systems). There are plenty of market failures here when it comes to childcare.
  - mattnewport 8y ago
    The price of something being higher than you'd prefer does not mean there is a market failure. Child care is not a public good and there are not obvious externalities. Excessive regulation might be a factor but that is not market failure. The fact that the unsubsidized cost of child care is higher than some parents are willing to pay may just be evidence that there are no efficiencies to be gained for those parents. Perhaps the economies of scale for child care are less than you assume.
    - omegaworks 8y ago
      You're computing the value of a parent's career as a single point in time salary value, and not as a integration under the curve of salary earned over time. A parent may not have the cash reserves at that single point in time to pay for childcare out of pocket, that doesn't mean that the value they get from staying employed over time does not exceed that cost. Leaving the workforce starts you over at zero. Universal childcare, especially in the earliest stages of life, provides societal externalities that vastly outweigh the cost of providing it. It ought to be a public good.

xenadu02 8y ago

Taking time off from your career puts you behind your peers. That's no surprise. If women take time off to raise young children that hurts their long-term earnings. Again, no surprise. If we want to frame it in purely economic terms vis-a-vis government: Does the long-term increase in taxes paid by working mothers cover or exceed government outlays to provide childcare, especially in the early pre-K4 years? Secondarily is there any negative effect on the children and if so can those effects be mitigated? The study seems to indicate it is a net-win for the government because high-cost childcare only happens for 1-3 years but the earning power increase lasts the rest of a woman's career. I presume rational government policy would attempt to make free childcare tax neutral in this case. In alternative terms you could see this as the government making a short-term (3 year) loan to cover childcare while being paid back in the form of higher taxes paid by the beneficiaries over the next 20-30 years. Whether this makes sense for an individual couple is another matter. Whether the government should encourage new daycares or people to train as childcare providers is also another matter that bears some similarities to the universal healthcare arguments (eg that the government would want to encourage more people to train as doctors and nurses since the expected demand for services would increase, though true believers in the free market should expect the market to take care of such problems).