Child Care Problem: An Economic Analysis

The child care system in the United States is widely criticized, yet the underlying structural problems are difficult to pin down. In The 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 Problem also 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 Problem concludes 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 Problem provides 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.

DAVID M.BLAU is professor economics at the University of North Carolina, Chapel Hill.