The Economic Rationale for Investing in Children: A Focus on Child Care. Abstract


This paper attempts to draw lessons from evaluations of health care policy for the debate over child care policy. Conclusions include: The desirability of setting clear goals for policy; the importance of liquidity constraints, information failures, and externalities in the market for child care; the fact that eligibles may not participate (low takeup), that publicly provided programs may "crowdout" private childcare, and that outreach to eligible non-participants may be necessary; the need for rigorous evaluation of child care quality and its long-term effects; and the fact that since the family is still the primary supplier of child care, policies that support good parenting are likely to be an important component of sound child care policy.