September 13, 2017

The Democrats’ Double Down on Daycare is Dangerous



Politico reports this morning that “Senate Democrats are angling to take on Ivanka Trump and the Trump administration on one of her signature issues,” affordable child care. Their bold and transformative idea?

Federal subsidies for daycare!

Joshua McCabe provides some important historical context for why that gambit is folly — in short, everytime Dems have tried to outflank Republicans on big “pro-family” policy initiatives like day care subsidies or Universal Pre-K they get, well, schooled. Indeed, the “Child Care for Working Families Act,” as they’re calling, is eerily similar to Senator Christopher Dodd’s Better Child Care Services Act from 1988, which got dismissed as unworkable in favor of an EITC expansion. As McCabe points out, if history repeats itself the Democrats’ strategy will only lock them out of the current negotiations over the First Daughter’s Child Tax Credit expansion, when they could be an important voice for making the proposal even more pro-poor by pushing for a larger credit or greater refundability.

But what about the idea of a national daycare program on the merits? I wrote on that topic in The Hill last year:

In 1997, the Canadian province of Quebec (which has traditionally been the North American protégé of European-style welfare states) took up the experiment. With the help of aggressive government subsidies, the cost of daycare was reduced to a flat $5 a day for all children aged four and under. The first program of its kind, it fueled a national debate about the merits of a federal day care scheme along the same lines.

 

But as the early results of the experiment came in, it quickly became clear that Quebec had made a grave mistake. A comprehensive 2005 study revealed that the program caused a disturbing deterioration in outcomes relative to the rest of Canada. Child aggressiveness and anxiety jumped, parental mental health declined, and the home environment become more hostile. Most alarmingly, a follow-up study published last year found the damage persisted well into adolescence, with the teenagers who used the program exhibiting higher crime rates and lower overall life satisfaction.

 

At the center of this disastrous experiment was a government that thought it knew the needs of children better than their parents did.

You can find the NBER digest of the research on Quebec here, subtly titled “Canada’s Universal Childcare Hurt Children and Families,” and the follow-up research here, co-authored by Jonathan Gruber of MIT. From the abstract:

We first confirm earlier findings showing reduced contemporaneous noncognitive development following the program introduction in Quebec, with little impact on cognitive test scores. We then show these non-cognitive deficits persisted to school ages, and also that cohorts with increased child care access subsequently had worse health, lower life satisfaction, and higher crime rates later in life.

Note that Quebec’s program has substantial similarity to proposals like the ones put out by Center for American Progress, in that it works by capping the cost of daycare for parents. But even if you think a national day care subsidy in the U.S. would turn out better, there are of course many other reasons to favor simple cash payments to families instead, including cost-effectiveness and neutrality to different ways of life. That, in so many words, is the argument for a child allowance.

Even Hillary Clinton has come around to the case for universal cash transfers. So why is Democratic Leadership stuck in 1988?