The Broadbent Blog

The case for child care


Leader of the Opposition Thomas Mulcair has launched a new round of debate over the need for a national child care and early learning program. The NDP poposal would help the provinces to finance quality, affordable child care systems, delivered by regulated providers in place of the current patchwork quilt of formal and informal care of varying price and quality.

After being elected in 2006, the Harper government cancelled provincial agreements signed in the final days of the Liberal government and instead introduced a $100 per month so-called Universal Child Care Benefit for all parents with young children. Underpinning this Conservative policy is the belief that the market and families can and should provide adequate care for children. Indeed, the costly Conservative proposal to introduce family income splitting is intended to further support a traditional family with a stay at home spouse, not withstanding its skewed bent towards helping the wealthiest families.

While social conservatives dream of restoring the traditional family, this flies in face of reality. By choice or by necessity, the great majority of today's families with young children need care arrangements because one or both partners participate in the paid workforce. Women remain the major providers of child care, and the labour force participation rate of women with a child under age six is 73.5%, and 64.7% for single parents.

While the need is clear, the most recent figures show that there are regulated child care spaces available for less than one in four (22.5%) of Canadian children under five years of age, a national average which is boosted by Quebec's provincially funded comprehensive program. At the other end of the spectrum, Saskatchewan provides regulated care for just 11.5% of infants.

The cost of child care is high, with median fees for infants averaging $761 per month, but a much lower $152 per month in Quebec. While low-income families can qualify for subsidized spaces, waiting lists are long. and many parents are forced to resort to inferior, informal care arrangements.

A key argument for a national child care program and early learning system is that children, especially from lower-income families, will benefit from greater availability of affordable, high quality spaces.  

Research has found that investments in quality pre-school education, such as the Perry program in the United States, have very high rates of return for disadvantaged children. Compared to control groups, early learning program participants do better at school, proceed further in the educational system, have higher lifetime incomes, pay more in taxes, and incur lower costs to governments.

While gains are greatest for children from very disadvantaged backgrounds, there is still a significant gain if children move from informal, non-parental care to higher quality programs. In addition, child care investments increase participation of parents (usually mothers) of young children in the paid workforce. If the cost of child care is high, and/or the quality of care is low, many women will drop out of the workforce on a temporary basis, or reduce their hours of work.

This comes at a cost in terms of lost output and productivity.

Even temporary withdrawal of women from the workforce is associated with lower earnings later in life due to foregone work experience and skills development, and the price can be especially high for those with limited skills.

A number of studies have found that Quebec's child care program, which provides quality care at an affordable cost, has boosted the labour force participation rate of women. The labour force participation rate of women with a child under age six is 80.2% in Quebec today, well above the national average of 73.5%, and much higher than, for example, the Alberta rate of 64.9%.

The highly respected Quebec economist Pierre Fortin calculates that the Quebec program has more than paid for itself by boosting the employment rate of women and thus Quebec's GDP and tax base.  In line with many earlier studies, on the overall rate of return from public investment in high quality child care and early learning programs in Canada, the Centre for Spatial Economics estimates that the rate of return would be $2.54 for every $1 spent.

In addition, they note that investment in child care has a very high immediate employment impact since it is very labour-intensive, meaning that it is an effective way to create jobs during a period of still high unemployment.

Put it all together, and a national child care program promises to be an important tool for giving an equal start in life to all children while making it easier for parents to balance work and family. Best estimates suggest that such a program would actually pay for itself. 

Andrew Jackson is Senior Policy Advisor to the Broadbent Institute.

Photo: Morgan. Used under a creative commons BY-2.0 license.