Excerpts
Economists Michael Baker, Johnathan Gruber and Kevin Milligan have just produced a remarkably important research study.
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Quebec’s $5 a day child care had really significant positive impacts on women’s labour force participation. The employment rate of Quebec women went from substantially below the rest of Canada to substantially above. The fixed, predictable parent fee removed a major barrier to mothers’ employment.
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Our Carney government needs to hear this message. Most provincial and territorial governments are telling him now that the current federal commitment of money to this program – about $8 billion per year – is too small to keep it alive for the next five years. Some are talking about leaving the program altogether or changing it dramatically to make parents pay more. It makes no sense to ditch a social program that helps hundreds of thousands of Canadian families, raises employment, raises women’s earnings, and increases tax revenues sufficiently to pay for the program.
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As many of us know, having children tends to have strong negative effects on women’s labour market outcomes, but not on men’s. This has come to be called the “motherhood penalty”, or sometimes the “child” penalty. For example, Canadian economists have found that, even ten years after a birth, mothers’ earnings are typically 34.3 percent lower than they were before birth, and on average nearly 15 percent fewer of these mothers are employed. That’s a huge motherhood penalty.
But, the research in Baker-Gruber-Milligan paper shows that Quebec mothers who benefited from its universal $5 a day child care program in the early 2000s had much higher earnings later in life as a result. This earnings impact was progressive, reaching an average of 27% by the time these mothers reached age 50.
So, not only did Quebec’s child care program more or less pay for itself, it also dramatically reduced the motherhood penalty that Quebec women faced throughout their lives. If that’s not a good news story, I don’t know what is.
And what it means for our government is that the investments they make right now in child care will make mothers’ lives better and family incomes higher for years and years to come. It sounds to me like the Canada-Wide Early Learning and Child Care program is just the kind of Major Project that Prime Minister Carney should be investing in. And while many of the Major Projects being discussed appear to be somewhat male-oriented, this one dramatically helps women to overcome the barriers that hold them back in the workforce.