Thursday, 22 January 2015

Childcare Subsidy no panacea for Job Creation

We may not have the intellectual firepower of Christopher Pissarides (being neither a 'enobled', a Nobel Laureate or professor on the LSE) but that may be an advantage. He argues that paying subsidies for childcare would create jobs - one for the mother (usually) who can now enter the job market and one for the childcare worker. What this simplistic argument forgets is that another solution to the employment problem (if you accept there is one) is that the childcare worker could just take another job while the mother stays at home. Net result is the same, unless you assume that more than one child would be looked after by the childcare 'industry'. It is up to you to decide which child is better looked after. That - and the question who pays the subsidies, and at what level - is another question.

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