I don’t know what the right amount for a government to spend on childcare is, and I don’t know how much of that spending should go to the middle class rather than to lower-income families. What I do know is that the argument being used to support the Canadian government’s new childcare-oriented budget, namely that by following the lead of Quebec’s 1997 childcare plan we can all benefit from a significant rise in labour force participation as mothers return to work, may be missing the point. When it comes to the labour force, we’re a long way from 1997:
(Or, to put it another way):
The biggest age cohort in Quebec in 1997 was 30-40 year olds, whereas in Canada today it is 60 year olds, roughly speaking. This means that where the labour force is concerned, the main issue is no longer working mothers. It’s senior citizens. In particular, it may be working-class seniors and elderly women who will determine Canada’s labour force size; the former being the most likely to work in jobs that are physically strenuous, the latter being (for example) twice as likely as men to reach 85 years old. (Indeed, the labour force participation rate among working-class men may have already fallen below that of professional-class women before Covid if you ignore the segment of the population aged 15-25, within which professional-class labour force participation is relatively low because of university attendance). Obviously, only by helping to keep seniors employed will Canada’s labour force remain active. The official labour force participation rate, meanwhile, is becoming antiquated: it only counts people between the ages of 15-64 as being in the labour force.
Chart 1: Labour force participation rates of men and women aged 25 to 54, 1953 to 2014
Figure 2 – Participation rate of older individuals (55-64 and 65-69), by gender and age group
Notice also, for Quebec in 1997 and, to a lesser extent, for Canada today, that there is a drop-off in population below the age of about 30-35. This means that the childcare programs were introduced just in time to assist mothers in their 30s, whereas many younger, working-class mothers already had kids too old for childcare.
(According to journalist Andrew Coyne, economists tend to say that government should simply send lower-income parents money earmarked for childcare, rather than adopt the Quebec plan in which childcare spots tend to be taken disproportionately by affluent parents, and least of all by lower-income parents who work jobs that don’t sync up with the 9-to-5 hours the childcare system provides).
[As a mostly irrelevant aside, the oldest of this Baby Boom generation came of age during the 1970 October Crisis and Pierre Trudeau’s invocation of the War Measures Act in Quebec, the youngest of this generation came of age just in time to vote in the secession referendum in 1980, and the generation as a whole reached its prime – 30-50 years old, say – around the time of the far closer (50.58% to 49.42%!), confusingly-worded, high-voter-turnout Quebec secession referendum in 1995. The narrow loss in this referendum led to Lucien Bouchard – who in 1995 had said “We’re one of the white races that has the fewest children” – to become Premier in 1996 and implement universal childcare in 1997. In the 1997 Canadian election, meanwhile, 3 of 4 most voted-for party leaders were Qubecois – Chretien for the Liberals, Duceppe for the Bloc Quebecois, and Charest for the Progressive Conservatives]
As it happens, Canada already had among the highest labour force participation in the world before Covid. According to the World Bank, only New Zealand, Switzerland, and Singapore had higher labour participation among developed economies in 2019. This doesn’t mean there isn’t room for further growth of course, but it should raise the possibility that Canada may have some more pressing concerns to address than labour force participation.
Where caring for children is concerned, I can think of at least one more pressing concern: road traffic, which is the leading cause of death for children out of infancy and a leading cause of wasted time and stress for working parents (especially for parents who have to find parking spots twice a day outside of their toddlers’ childcare centre, in winter). Road traffic is also a major barrier against senior citizen labour force participation, and senior citizen quality of life in general. Yet rather than try to reduce the size or number of vehicles on the road during rush hour (three-quarters of Canada’s new car sales are SUVs!), the budget instead contains vast amounts of money to build and buy new, oversized e-sedans. …As usual, all roads lead back to cars.
Future Economics 