The benefits provided to mothers by Quebec’s public child care network are at least three times higher than what it costs the government, a study estimates. And this economic value depends more on the number of places available than on their price.
From its beginnings in 1997 to its first freeze on the number of places in 2003, the public daycare network brought in a little over $6 billion to Quebec mothers, against a net cost of $1.7 billion for the Quebec government, or about $3.50 for every dollar invested, conclude the authors of a study whose broad outlines are to be presented Tuesday at noon before the Chair in Taxation and Public Finance at the University of Sherbrooke.
This sum of total economic benefits for young Quebec mothers is double what more traditional calculation methods would have found, argue the researchers, who in their calculations used comparisons with Ontario, where such a system did not exist.
These benefits come, among other things, from the opportunity that low-fee daycares offered mothers to return to the workforce more quickly than they otherwise would have done, as well as from not having to spend a fortune on private daycare. But this accounted for only a little over a third (37%) of the total, found micro-economist Sébastien Montpetit, one of the co-authors, with Pierre-Loup Beauregard and Luisa Carrer, of the study, which is based on his doctoral thesis at the Toulouse School of Economics.
More than just salary
The rest of the economic benefits came from “non-financial factors” that are not always easy to identify, but have an impact on people’s lives and a value that can be measured in dollars. “It’s a combination of several things,” explained Sébastien Montpetit in an interview with DutyAmong them, he says, is “the reduction in the effort required to care for children at home, the cost of which, per hour, increases the more time is spent on it in a day. And even if we take into account the fact that parents like to spend time with their children.”
And then there’s all the energy that many parents would otherwise have had to expend to find private daycare or other solutions. In this regard, having access to daycare nearby has a very high economic value.
This allows us to draw another important conclusion from the study, namely that the well-being of mothers, including economic well-being, depends less on the price of daycare spaces than on their availability and proximity, continues Sébastien Montpetit, who will pursue postdoctoral studies this fall at the University of Warwick, in England. Initially at $5 per day, then $7 and now just over $9, the price of spaces in the public daycare network thus accounts for only 16% of its economic benefits for mothers. “If we had to choose between reducing the cost of daycare services or increasing the number of spaces available close to families, the choice should be made for the latter,” summarizes the expert.
Paid or not for the State?
The study focuses primarily on the effects of the public childcare network on mothers, its author points out. He does not dwell long on its effects on the economic well-being or academic success of the children who benefited from it, except to observe that their economic and academic paths do not seem to have suffered or benefited much from it.
Since its inception, Quebec’s public network of reduced-fee daycares has often been cited as an example of a way to, among other things, help women participate in the labour market, give a boost to the middle class and reduce socio-economic inequalities. The Canadian federal government recently drew inspiration from it to implement a new policy in this area.
Unlike other studies, this one does not conclude that the program pays for itself through the tax revenues it generates. In fact, once the other programs and spending that the policy replaced are taken into account, its authors estimate that it cost the government a total of just over $2.6 billion between 1997 and 2003, from which must be subtracted additional tax revenues of just over $900 million, for a net cost of $1.7 billion.
If this is similar to what other experts have found before, it is a far cry from the conclusions of a study like the one conducted about ten years ago by economist Pierre Fortin and Luc Godbout, holder of the Chair in Taxation at the University of Sherbrooke. They said that for every dollar spent by Quebec on the program in 2008, it collected $1.04 in tax revenue and Ottawa collected 43¢.
Sébastien Montpetit attributes this difference in results in particular to the fact that, unlike him, the other two experts had estimated the effect of the reform not only on mothers, but also on all economic activity and its impact on direct and indirect tax revenues. Their study also did not look at the same period. “The cost structure of the program has changed a lot over time.”