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Subsidies To Child Care: Public Policy and Optimality

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  • Michael Krashinsky

    (University of Toronto)

Abstract

This article examines the efficiency of subsidies for extra-family child care. It is shown that if the government is attempting to maximize the household Abstract utility function revealed by the individual family, deductibility of child care expenses will constitute the maximum efficient subsidy. Concern for equity among families will also justify deductibility. Concern for the specific well- being of children can justify higher subsidies, but these should not be directed only through day care centers, and should be available to children whether or not their parents work and use day care. Finally, the effert of subsidies on fertility is shown theoretically to be ambiguous.

Suggested Citation

  • Michael Krashinsky, 1981. "Subsidies To Child Care: Public Policy and Optimality," Public Finance Review, , vol. 9(3), pages 243-269, July.
    • Handle: RePEc:sae:pubfin:v:9:y:1981:i:3:p:243-269
    DOI: 10.1177/109114218100900301
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    References listed on IDEAS

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    1. A. K. Cairncross, 1958. "Economic Schizophrenia," Scottish Journal of Political Economy, Scottish Economic Society, vol. 5(1), pages 15-21, February.
    2. Kelvin J. Lancaster, 1966. "A New Approach to Consumer Theory," Journal of Political Economy, University of Chicago Press, vol. 74, pages 132-132.
    3. Jacob Mincer, 1962. "Labor Force Participation of Married Women: A Study of Labor Supply," NBER Chapters, in: Aspects of Labor Economics, pages 63-105, National Bureau of Economic Research, Inc.
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    Cited by:

    1. Florence Jaumotte, 2003. "Female Labour Force Participation: Past Trends and Main Determinants in OECD Countries," OECD Economics Department Working Papers 376, OECD Publishing.
    2. William M. Gentry & Alison P. Hagy, 1996. "The Distributional Effects of the Tax Treatment of Child Care Expenses," NBER Chapters, in: Empirical Foundations of Household Taxation, pages 99-134, National Bureau of Economic Research, Inc.
    3. Florence Jaumotte, 2005. "Les femmes sur le marché du travail : Évidence empirique sur le rôle des politiques économiques et autres déterminants dans les pays de l'OCDE," Revue économique de l'OCDE, Éditions OCDE, vol. 2003(2), pages 57-123.

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