With New Mexico now going to implement universal child daycare, but to me it seems like unfair for single and childless people as they to have to pay for me, i have read some articles from Cato institute that proposes that it can be solved by market deregulations like liberalising child to worker ratio, licensing and zoning laws etc. Would a market based solution work according to you ?
Can childcare be solved through market forces alone, or is government support essential?
byu/Nearby-Difference306 inAskEconomics
Posted by Nearby-Difference306
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There are a few big issues in the childcare sphere:
1. As Cato notes, there is tremendous state level variation in child to provider ratios. https://childcare.gov/consumer-education/regulated-child-care/supervision-ratios-and-group-sizes
2. Restrictions on how and where this can be done (private residential facilities).
3. Because of 1. and 2., costs are likely higher than they should be.
Christos Makridis has a series of paper on childcare during the pandemic. A lot of issues were caused by the closure of facilities (especially unlicensed), which meant a lot of people either couldn’t find or care was very expensive.
That said, could you ease some of the space and cost issues by liberalizing regulations and licensure requirements. But you can’t let it be without any oversight. Because the consumers (kids) may not be aware of issues to report.
Edit: a few relevant papers.
1. [Lots of regulations are focused on easily observable measures](https://www.tandfonline.com/doi/abs/10.1080/00036846.2016.1276275) that don’t improve quality, but do increase cost.
2. [While regulations improve quality in high income areas, but reduces availability in low income areas.](https://www.aeaweb.org/articles?id=10.1257/aer.101.5.1775)
3. [A good JPAM paper (haven’t read it yet, to my chagrin) detailing evidence up until 2022, including policy.](https://onlinelibrary.wiley.com/doi/abs/10.1002/pam.22436?casa_token=-ahhrZPfhygAAAAA%3AYaw4vRjZ-UzZe_-yR2to58MULUH1N-OPl75H371ntTtWhBSLciMFbMpxNMlUXRzl5xdJ1CJElIl_&casa_token=eHb6ap7EXv8AAAAA%3AT1QMjtXzMujtY_3APs-WuC5BMPwIUYqRNyz7gxPccJiRwvBONupA_AG-AH_e3GnfqP6kMb45Ecxb)