AIER, Great Barrington – Week 11 – The Problem with Child Care: Lack of Government Funding or too Much Regulation?

Callum Hudson

Politics in the United States was at its best this week with the continuing threat of another government shutdown and details of the Green New Deal being released.  Incredibly, the parties agreed on the Border Wall funding, avoiding another government shutdown.  Tensions were still rising though as Trump declared the southern border a national emergency in order to attain more funding.  Both major parties continue to be at each other’s throat.

The office felt like a ghost town, with many of the full-time staff heading down to Mexico for the infamous Anarchapulco Conference.  Despite the lack of staff there was plenty of work to be done.  I began the week by entering some more IRS tax data for my supervisor, Phil W. Magness.  The data was going towards his inequality paper comparing state and federal reported income. 

Due to Mr Magness being out of town this week I was working under Senior Research Fellow Max Gulker.  Mr Gulker was wanting to write an article summarising the current child care regulatory landscape, which meant I had the task of being his research assistant.  I spent the next day or two mapping out the regulatory landscape and the relationship between federal and state regulations.  I was surprised at how much regulatory power the individual states had compared to the federal government.  I was expecting more of the regulation to come from a centralised piece of legislation, since states receive large grants through the Child Care and Development Block Grant Act (CCDBG). 

Throughout federal and state child care regulation the same sentence appeared, “to create quality child care”.  None of these documents took the time to describe what quality child care meant, or seemed to have done any research regarding the implemented regulation and the quality of the child care.  The harsh regulatory landscape surrounding staff education, group sizes and staff-child ratios made running a profitable facility close to impossible, with staff wages suffering the most.  The depression of staff wages makes the industry have a high staff turnover rate and difficult to attract well educated and experienced workers.  The opposite result the regulation intended to have. 

The rest of the week was spent running regressions between different child care cost measures and state regulatory and/or business friendly indexes.  As we expected, the results showed a good correlation between the two variables and will make a nice infographic for the article. 

The majority of my spare time this week was spent relaxing and exploring the AIER grounds, with its beautiful snow-covered lake and mountains just a few hundred meters from the office.