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Child Care Problem

Child Care Problem: An Economic Analysis

David M. Blau
Copyright Date: 2001
Published by: Russell Sage Foundation
Pages: 280
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  • Book Info
    Child Care Problem
    Book Description:

    The child care system in the United States is widely criticized, yet the underlying structural problems are difficult to pin down. InThe Child Care Problem, David M. Blau sets aside the often emotional terms of the debate and applies a rigorous economic analysis to the state of the child care system in this country, arriving at a surprising diagnosis of the root of the problem.

    Blau approaches child care as a service that is bought and sold in markets, addressing such questions as: What kinds of child care are available? Is good care really hard to find? How do costs affect the services families choose? Why are child care workers underpaid relative to other professions? He finds that the child care market functions much better than is commonly believed. The supply of providers has kept pace with the number of mothers entering the workforce, and costs remain relatively modest. Yet most families place a relatively low value on high-quality child care, and are unwilling to pay more for better care. Blau sees this lack of demand-rather than the market's inadequate supply-as the cause of the nation's child care dilemma.The Child Care Problemalso faults government welfare policies-which treat child care subsidies mainly as a means to increase employment of mothers, but set no standards regarding the quality of child care their subsidies can purchase.

    Blau trains an economic lens on research by child psychologists, evaluating the evidence that the day care environment has a genuine impact on early development. The failure of families and government to place a priority on improving such critical conditions for their children provides a compelling reason to advocate change.The Child Care Problemconcludes with a balanced proposal for reform. Blau outlines a systematic effort to provide families of all incomes with the information they need to make more prudent decisions. And he suggests specific revisions to welfare policy, including both an allowance to defray the expenses of families with children, and a child care voucher that is worth more when used for higher quality care.

    The Child Care Problemprovides a straightforward evaluation of the many contradictory claims about the problems with child care, and lays out a reasoned blueprint for reform which will help guide both social scientists and non-academics alike toward improving the quality of child care in this country.

    eISBN: 978-1-61044-059-2
    Subjects: Sociology, Finance

Table of Contents

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  1. Front Matter
    (pp. i-vi)
  2. Table of Contents
    (pp. vii-viii)
  3. About the Author
    (pp. ix-x)
  4. Acknowledgments
    (pp. xi-xii)

    • Chapter 1 What Is the Child Care Problem?
      (pp. 3-16)

      Child care in the United States is a problem. This is the message of many newspaper and magazine articles and reports by think tanks, government agencies, and conferences. Depending on whom you ask, the child care problem endangers the well-being of children, causes financial hardship and stress for families, makes it next to impossible for low-income families to work their way off welfare, causes substantial productivity losses to employers, and prevents many mothers from maintaining productive careers in the labor force. What is the nature of the child care problem? Why does it exist? What is being done to solve...

    • Chapter 2 An Overview of the Child Care Market in the United States
      (pp. 17-46)

      How many American children are cared for on a regular basis by adults other than their parents? What are the characteristics of these children and their families? Who provides the child care, and where is the care provided? What are the characteristics of the providers? How much do parents pay for child care? What is the quality of care provided? This chapter provides an overview of child care in the United States by addressing these questions.

      Economic models of a market are not very useful unless they are solidly grounded in the basic facts about the market, and my intention...

    • Chapter 3 Economic Models of Child Care
      (pp. 47-64)

      This chapter describes simple economic models of the behavior of child care consumers, producers, and the resulting market outcomes. A model focuses attention on the essential aspects of a problem and provides a framework for interpreting the results of empirical analysis. Suggesting hypotheses that can be tested empirically, a model is not “right” or “wrong”; it is either useful in accomplishing these objectives if it is thoughtfully constructed, or it isn’t.

      Sometimes a problem is so simple to understand (though not necessarily to fix) that the discipline of formulating and deriving the implications of a formal model is unnecessary. In...


    • Chapter 4 The Demand for Child Care and the Labor Supply of Mothers
      (pp. 67-85)

      This chapter describes the results of empirical analyses of consumer behavior in the child care and labor markets. As described in chapter 3, the supply of labor by mothers of young children is closely related to the demand for child care, and it makes sense to analyze them together. I discuss results from empirical estimates of demand for the quantity, quality, and type of child care, and the labor supply of mothers. Most of the results discussed are from my own analyses, but I also compare my results to others in the literature.

      The model of consumer behavior developed in...

    • Chapter 5 The Supply of Child Care
      (pp. 86-103)

      In this chapter, I analyze the determinants of the behavior of child care providers, including the relationship between cost and quality, the supply of quality, and the supply of child care labor. The first part of this empirical analysis is guided by the model developed in chapter 3 of child care providers who charge a fee for their services. This part of the analysis relies exclusively on data from day care centers. Other types of providers, such as family day care homes, baby-sitters, and some relatives, charge fees as well, but the data needed to analyze their behavior in the...

    • Chapter 6 Equilibrium Price and Quality in the Child Care Market
      (pp. 104-124)

      This chapter analyzes the relationship between price and quality in the child care market, based on the model of market equilibrium developed in chapter 3. That model predicts that if consumers are willing to pay a higher price for higher-quality child care, and if higher-quality child care costs more to provide than lower-quality care, then there will be a positive relationship between price and quality in equilibrium. If either condition fails to hold, then we should observe no systematic relationship between price and quality. The strength of the price-quality relationship will depend on the distribution of consumers according to their...

    • Chapter 7 The Determinants and Effects of Child Care Quality
      (pp. 125-146)

      What determines the quality of child care? Does the quality of child care affect the development and behavior of young children? These are the issues addressed in this chapter. They are important because any policy proposed as a solution to the child care problem must take a stand on whether improving the quality of care is the primary goal of the policy. To have a sound basis for choosing such a goal, it is important to be clear about what we mean by child care quality, how quality is produced, and how quality affects children.

      Developmental psychologists have created a...


    • Chapter 8 Child Care Subsidies
      (pp. 149-172)

      In this chapter, I describe and analyze child care subsidy policy in the United States. Child care subsidies are one of the two major parts of U.S. government child care policy; the other is regulation, which I analyze in the next chapter.¹ It is important to understand the current child care subsidy system to determine whether it is sensible, and how it should be reformed, if at all.

      I begin by providing an overview of child care subsidy policy. I take a broad view of child care subsidies, discussing not only subsidies tied to the employment of the parents but...

    • Chapter 9 Child Care Regulations
      (pp. 173-207)

      Regulation would appear at first glance to be the most direct way for the government to influence the quality of child care. Many service industries and occupations are regulated and licensed to ensure that low-quality service is not offered. But if regulations impose only minimum standards or are not supported by vigorous enforcement, then they may not be as effective at improving quality as other approaches.

      Increased regulation of child care is favored by some non-economists who advocate policy reform, while most economists who have proposed new child care policies favor subsidies over regulations (see chapter 10). Economists tend to...

    • Chapter 10 What Should We Do About the Child Care Problem?
      (pp. 208-232)

      In this chapter, I present my ideas on what should be done about the child care problem. These ideas are based on findings from the research described in previous chapters, and on my judgment about the goals that child care policy should seek to accomplish.

      The descriptions of research findings in previous chapters often emphasized that there is much that we do not know, and that many of the research findings may not be robust. As is often the case in social science research, we have an abundance of empirical correlations among variables, but a paucity of solid evidence on...

  8. Notes
    (pp. 233-246)
  9. References
    (pp. 247-260)
  10. Index
    (pp. 261-266)