Myths about Childcare Subsidies: The facts on daycare

Is day care an unalloyed good? Policy Analyst Ben Eisen looks at the research literature and finds the benefits of daycare to be ambiguous, and that a universal childcare system is likely an overly expensive and inefficient policy option.
Published on January 18, 2010

 

Subsidizing childcare has become one of the most controversial items on the Canadian policy agenda in recent years. The increased prominence of childcare as a political issue was brought about by a concerted advocacy campaign by those who believe a dramatic increase in childcare participation has the potential to bring a wide variety of benefits to Canadian society including superior academic performance and long-term increases in productivity.
 
A close examination of the research literature in this area reveals that these exciting promises of huge returns on childcare spending are built upon a shaky empirical foundation. A growing body of evidence suggests that for most children, the effects of most childcare interventions are extremely short lived and fade out almost entirely in only a few years. Furthermore, there is strong evidence that the long-term benefits of childcare that do exist are concentrated almost entirely among poor children, a fact that argues in favour of targeted subsidization rather than expensive universal programs. In addition to this ambiguity surrounding the purported long-term benefits of childcare subsidization, a growing body of literature suggests that lengthy periods of exposure to formal childcare may actually have a negative effect on child development, particularly in terms of social development and health outcomes.
 
In light of these complications, the confident claims of childcare advocates concerning the benefits of large-scale spending on universally subsidized childcare do not square with the ambiguous research literature in this complicated area of social science. This backgrounder will examine these ambiguities and demonstrate that massive spending on universal childcare subsidization is likely not the long-term social and economic panacea some activists suggest it is.

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