Universal childcare has potential negative social consequences

On April 28th, President Joe Biden announced an ambitious plan to offer universal pre-school to 3 and 4-year-olds. As shown, this idea has a lot of drawbacks, like most plans aimed at expanding childcare subsidies.

But how does universal childcare affect kids specifically? For that, we have to look into a similar program that was introduced in Quebec in 1997. As described by the NBER,

Beginning in 1997, the Canadian province of Quebec extended full-time kindergarten to all 5-year olds and included the provision of childcare at an out-of-pocket price of $5 per day to all 4-year olds. This $5 per day policy was extended to all 3-year olds in 1998, all 2-year olds in 1999, and finally to all children younger than 2 years old in 2000.

How did this program work out? Authors Michael Becker, Jonathan Gruber, and Kevin Milligan conducted a study on how this program impacted kids. According to the researchers, on the top side, this program increased the use of outside childcare and therefore an increase in labor supply from women.

The authors first find that there was an enormous rise in childcare use in response to these subsidies: childcare use rose by one-third over just a few years. About a third of this shift appears to arise from women who previously had informal arrangements moving into the formal (subsidized) sector, and there were also equally large shifts from family and friend-based child care to paid care. Correspondingly, there was a large rise in the labor supply of married women when this program was introduced.

However, the program had a negative impact on the well-being of kids, and the quality of parenting.

Disturbingly, the authors report that children’s outcomes have worsened since the program was introduced along a variety of behavioral and health dimensions. The NLSCY contains a host of measures of child well being developed by social scientists, ranging from aggression and hyperactivity, to motor-social skills, to illness. Along virtually every one of these dimensions, children in Quebec see their outcomes deteriorate relative to children in the rest of the nation over this time period. Their results imply that this policy resulted in a rise of anxiety of children exposed to this new program of between 60 percent and 150 percent, and a decline in motor/social skills of between 8 percent and 20 percent. These findings represent a sharp break from previous trends in Quebec and the rest of the nation, and there are no such effects found for older children who were not subject to this policy change.

The authors also find that families became more strained with the introduction of the program, as manifested in more hostile, less consistent parenting, worse adult mental health, and lower relationship satisfaction for mothers.

Childcare is a fundamental structure of the economy –– it frees parents for work and developmentally prepares children for education. Universal childcare, however, distorts choice and pushes more parents into opting for outside care –– especially center care–– even in instances where outside care would not be ideal or highly preferred. This can have adverse consequences as seen in Quebec.