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forumposter123@protonmail.com's avatar

Our daycare charges $350/week. I have no particular reason to believe it is more expensive than an average daycare, and some expensive cities may be worse.

We could save a few bucks if the daycare was some Hispanic lady with a bunch of kids in her townhomes basement, but for a normal daycare you would actually want to send your kid to this seems normal.

My daycare also only takes kids age 2+, which has less regulations and lower teacher/student ratio.

So that is $18,200 a year per kid. Via the tax wedge (ours is probably more like 50% but we will use 40%) that's approximately $30k per year per kid.

According to this CNBC article from 2020 the average 30 year old woman earns $45,084 annually. So daycare for a single child would eat 2/3rd of her earnings. Two kids would mean that working cost money rather than made money. Forget three.

I would also add that there are inconveniences to daycare. The kids need to be there are a certain time. The daycare is itself a commute which eats time. Daycares, like schools, close often for all sorts of reasons, so you have to take off work to watch the kids.

I think the bottom line is that at least 80% of women shouldn't be sending their kids to daycare. It's sheer irrationality.

The #1 reason given for doing this is that stepping off the career ladder for five years or so will irreparably damage long term career prospects. While there is some truth to this, I think the fear is overemphasized. And certainly the lower the earnings of the woman the more she has a job and not a career anyway.

The best way to make the math work with multiple kids if you aren't going to stay home is with an Au Pair. The tax wedge (at least on the workers side) goes away. You mostly pay them in food and shelter that is zero marginal cost to your household. There is the awkwardness of sharing a house with a stranger, but people with big houses and designated guest living space makes this easier.

As to market failure, I believe the market failure is that liberals assert that having a career is a human right necessary for a woman to be a complete person, and its a market failure that this can't be done economically. No different from any other "market failure" that doesn't solve supply/demand equilibriums that liberals just don't like.

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John Bowman's avatar

When considering ‘market failure’, isn’t the start point... Government intervention in the market? In the UK ‘background checks’ supposedly to ensure people with criminal records are not let loose on ‘vulnerable’ people, has reduced the number of people available because the individual has to pay for a background check report and many cannot afford to or don’t want it. Secondly, minimum wage increases has boosted costs to providers who simply cannot afford enough staff.

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