Economics of Child Care: Costs, Needs, and Issues

Abstract

A policy on child care requires knowledge of alternative programs of different scopes, the relative benefits of these various programs, and their respective costs. This chapter discusses issues of costs and quality of child care. The first section deals with definitions and some data problems: what are we talking about in discussing the costs and need for child care of different kinds? The second section reviews the costs of child care as reported in several major studies. The third section reports data on demand for child care at different prices. The demand parents make for child care at different prices--and the costs of different kinds of care--point to a seriously wide funding gap between what parents and governments now pay for child care and what is needed to provide the kind of care they want. The final section also sets forth several major implications for national policy, including the costs of providing universal child care for children under six. Some possibilities for meeting these costs are discussed.