A report by the Canadian Centre for Policy Alternatives found that market-based approaches are not effective for the childcare industry, especially during an economic downturn.
Earlier this week, we discussed how universal preschool can make early education more accessible for all. One country demonstrating the benefits of this subsidized educational opportunity is Quebec, where universal childcare is making both education and the professional world more equitable.
In the Canadian province, childcare is funded as critical infrastructure, just like roads and schools, and research has found that the investment essentially pays for itself in revenue generated by the women who are able to stay in the workforce as a result of the subsidy. During the pandemic, this meant that childcare services were available for essential workers and these centers could keep their doors open, even with a limited number of children, because of the security of government funding.
The basis of Quebec’s childcare model is research demonstrating the societal benefits of universal childcare. A report by the Canadian Centre for Policy Alternatives found that market-based approaches are not effective for the childcare industry, especially during an economic downturn. We saw this during the pandemic in which private childcare facilities were forced to raise their prices due to low demand while in turn, the high prices of childcare cause women to drop out of the workforce, slowing the already sluggish economy.
One big issue is that when economic conditions are poor, childcare centers feel the brunt of the recession more than other industries. For families with limited income and job loss, paid childcare is often the first thing to go when tightening a budget. A recent economic analysis in the US found that a one percentage point drop in a state’s unemployment rate was associated with a 2-3 percent decrease in employment in the childcare industry.
An estimated 20,000 childcare programs throughout the US have shuttered permanently during the pandemic. In comparison, a survey on Quebec childcare centers found that government-subsidized centers saw an enrollment drop of just five percent while private centers lost 30 percent of child attendance.
Based on Quebec’s successful model, the Canadian government has now proposed a federal investment of C$30 billion over five years to make the cost of childcare less than C$10 a day per child.
Other countries, including Japan, Sweden, Denmark, Norway, and Australia have also implemented universal childcare programs with similar success rates. So far, the biggest challenge for Quebec is opening up enough public child care centers to meet demand.