What families stop paying
The average price of child care is 13,184 dollars a year, about a tenth of a two-parent income and a third of a single parent's. Under the cap most of that bill moves from the family to the federal budget.
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Value
The stream is money families no longer pay, priced at the middle of the scale like all money. The federal budget pays it instead, which is the argument standing against this one, and the difference between the two is what a euro is worth in a household paying a third of its income for care against what it is worth in the treasury. Only the part of the federal outlay that replaces a bill families are already paying is counted here; the rest buys care that does not exist today, and what that care does is counted in the two arguments after this one rather than as money. Nothing is counted for the relief of not having to choose between a job and a child, which is the same fact as the money. Nothing is counted for the child care workers whose pay the higher rates would raise, which is a further transfer and is not estimated here. The value is the middle of the scale, and only the part of the public money that replaces a bill families already pay appears in this argument.
Impact
Estimates of what a federal child care entitlement costs run from about 60 billion dollars a year for a subsidy along the lines of the bill to more than 190 billion for a full entitlement covering every child under five [3]. Eighty-five billion is used here, or 73.3 billion euro, which is the bill as drafted rather than the largest version of the idea. Not all of that lands as relief: the total American bill for paid child care is smaller than the programme, because the programme also raises what providers are paid and brings children into care who are not in it today. Forty-five percent is taken as relief of bills families already pay, in a range from 30 to 60 percent, giving 33.0 billion euro. Those families are spread across the income distribution but weighted below the middle of it, since the cap binds hardest where income is lowest; a weight of 1.6 is used, in a range from 1.2 to 2.1. That gives 52.8 billion euro a year. The Impact is the largest on this side and it is deliberately only part of the public money, because the rest buys something rather than replacing something.
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| Federal cost of the entitlement Setting, range 60 to 190 billion dollars: the lower figure is the bill as drafted, the upper a full entitlement for every child under five [3] | 85 billion dollars a year | 73.3 billion euro a year | |
| × | Share that replaces a bill families already pay Setting, range 30 to 60 percent: the rest raises what providers are paid and brings children into care who are not in it today [4] | 45 % | 33 billion euro a year |
| × | Weight of a euro in the households the cap binds hardest for Setting, range 1.2 to 2.1: care costs a tenth of a two-parent income and a third of a single parent's | 1.6 | 52.76 billion euro a year |
| ÷ | Normalised Impact scale of this evaluation | 10 billion euro a point | 5.28 |
Plausibility
What the programme costs is a projection and the range around it is wide, which is unavoidable for an entitlement whose cost depends on how many families take it up. The counterfactual is the present subsidy, which reaches about one eligible child in six. The chain is named — cap on family payment, federal reimbursement of the difference, lower household bill — and the link carrying the quantity is take-up, which is behavioural: an entitlement that requires an application will not reach everyone entitled to it, as the present system demonstrates. The confounder that matters is the split between relief and new spending, which no source measures directly and which is set here rather than found; a programme that mostly raises provider rates would deliver much less relief than assumed. That is named and unresolved. Reverse causation does not arise. The Plausibility is a little above the middle: the arithmetic of a cap is simple and the two numbers it runs on, cost and the share that is relief, are both estimated.
Counterfactual: the present subsidy system, which reaches about one eligible child in six. Design: mechanistic — the cap arithmetic is statutory, but take-up and the split between relief and new spending carry the quantity and neither is measured. Confounder: a programme that mostly raises provider rates would deliver far less household relief than assumed; named and unresolved. Direction: no reverse causation. Ceiling: projection 6.0 binds and mechanistic gives the same.