Universal Child Care Boosts Mothers' Long-Term Earnings and Tax Payments
Investing in mothers? The long-run impact of a universal child care
A new NBER working paper by Michael Baker, Jonathan Gruber, and Kevin S. Milligan examines the long-run effects of Quebec's universal, subsidized child care program on maternal labor outcomes. The study finds that the program led to enduring increases in employment, with earnings gains growing over time to twice the size of the participation effect. This growth stems from increased work intensity and higher hourly wages, indicating multiplier effects from early career investments. The fiscal benefits, through higher tax remittances and reduced social assistance, may recapture between 75 and 117 percent of the program's upfront costs.
Our estimate of the fiscal balance of these effects reveals that the net present value of the flow of fiscal benefits may recapture between 75 and 117 percent of the upfront costs of the program.
- purpleflame1257
The same authors saw some evidence of development problems among the children in the same cohort. https://www.nber.org/papers/w21571
- black6
This assumes that mothers in the workforce earning (taxable) income is a benefit in and of itself. It doesn't consider the familial impacts of outsourcing the raising of ones own offspring to another party.
- Tycho
So from a fiscal perspective, it more or less pays for itself through greater career taxable earnings of the women, according to the study.
(EDIT: unless of course these extra earnings were mostly transfers so-to-speak from non-mothers to mothers)
From a societal and human perspective, unclear that it’s worth it.