Childcare for all? Sen. Elizabeth Warren has proposed to a new plan for universal childcare, about which Aparna Mathur, Abby McCloskey, and Angela Rachidi write:
First, just because something is expensive does not mean the government should subsidize it for everyone. Support should be targeted to families for whom the cost prohibits working or directly results in compromised quality of care. The more income-targeted the approach, the fewer unintended consequences that result and the less support to families that can pay for child care on their own.
Second, and ironically, government efforts to address affordability would likely increase the costs of child care even further. As the economist Jeffrey Dorfman writes, “when government provides payments for anything, the cost of that good or service always rises.” This is because costs become distorted when providers have no incentive to increase productivity and compete for business. And increased costs do not always mean higher-quality care. Parents are less likely to hold providers accountable for quality when they pay little for it.
Third, it is important to remember that we are not starting from scratch when it comes to helping families with child-care expenses. The proposal layers on top of the existing system of tax credits and block grants to states.
[Aparna Mathur, Abby McCloskey, and Angela Rachidi, “Universal Child Care Is the Wrong Approach,” American Enterprise Institute, February 22]
