Conservatives worry about the disincentive to work inherent in traditional welfare programs, which is a reasonable fear. We don’t want to subsidize dependency and tax productivity. But part of the old “poverty trap” was not the child allowance per se but the implicit high marginal tax on earnings as parents re-entered the workforce. Niskanen points to Canada’s experience with a direct child allowance, finding that labor force participation actually increased after their child allowance was increased in 2016. Putting more money in the hands of parents permitted some mothers to return to work.
Another benefit of Romney’s approach is that it respects the wishes of parents. There’s a weakness on the left for the idea of clean, bright daycare centers staffed by Ph.D.s, producing happy and well-socialized boys and girls, and permitting mom and dad to go off to their rewarding jobs. But a quick glance at the local public school should be enough to raise doubts about the supply of “high quality” care. In fact, most daycare arrangements are far from ideal. However desirable it might be, you can’t get Ph.D.s to supervise toddlers at the prices our society is willing to pay. Here again, Canada’s recent experience is instructive. Quebec instituted a $5-per-day universal day care in 1997. The number of families placing pre-schoolers in care jumped by 33 percent. But a study published in 2015 by the National Bureau of Economic Research found some disturbing results: Compared with kids from other provinces, Quebec’s kids were less healthy and less satisfied with life. Most strikingly, Quebec experienced a spike in crime among the teenagers who had been in daycare as children.
