Jean-Yves mentioned two types of equity that are generally discussed in public economics: vertical equity (which favours the redistribution from the top end of the income distribution to the lower end), and horizontal equity (which calls for identical treatment of identical individuals).

Suppose that it's been decided that public funds should be use to help parents defray the costs of child care. How does the Quebec model fit in?

First, let's consider two individuals (in practice, invariably the mother), A and B. A and B are identical in every way that matters, except for one thing: A would prefer to stay home and raise her children, while B would prefer to work. Both options are costly. A is obliged to sacrifice the income that she could have obtained by going to work, and B must deal with the financial costs of child care. (Of course, the costs are not just financial: both choices involve significant levels of stress and foregone opportunities.)

If the announced goal of a child-care policy is to help parents defray these costs, then according to the principle of horizontal equity, there's no reason for the government to choose to help one of these mothers and not the other. It turns out that the Quebec model fails this test: it chooses to help B, notwithstanding the fact that A and B are identical in every respect other than the choice of going to work or staying at home.

Since the only way to benefit from this program is to choose to go to work, It's not so much a child care program so much as a program designed to encourage mothers to return to work; Pierre Lefebvre and Phil Merrigan at UQAM have found that - unsurprisingly - the labour supply of women has increased (source - pdf file).

So the Quebec model fails the horizontal equity test. What about vertical equity? Mathieu Grenier, a MA student at UQAM wrote his thesis (available here) under the direction of Lefebre and Merrigan last year on this topic. Here is a table summarising the main results.

The utilisation rates and subsidies received increase with income. It's not difficult to come up with some plausible explanations for why this would be the case:

- High-skilled women are more likely to choose to work than those with fewer skills.
- The daycare system is almost entirely designed for those with 9-to-5 jobs, the sort that low-income workers are less likely to have.

So the Quebec model fails the vertical equity test as well.

What about the Conservatives' proposal? Since it's available to all parents, it satisfies the horizontal equity criterion. And since the payments are all equal and all subject to the (progressive) income tax, it satisfies the vertical equity criterion as well.

This doesn't mean that the Conservatives' proposal is perfect, of course. But if progressives are looking for a better alternative that satisfies the basic criteria for equity, it shouldn't be looking at the Quebec model.

[Yes, I know that there's already a thread on this topic, but I figured that this had enough new material to justify starting a new thread.]

[ 14 June 2006: Message edited by: Stephen Gordon ]

Instead of saying the Quebec child care plan is "not so much a child care program as a program designed to encourage mothers to return to work", you could equally characterize it as a program designed to free mothers to return to work if they want, by giving them a choice; for many do not have a choice. To characterize this as a violation of "horizontal equity" principles suggests that there is something sinister and reprehensible about it, whereas it is quite the contrary.

The fact that the Harper "plan" satisfies both your horizontal and vertical "equity" criteria is hardly the last word on the subject. It even begs the question as to whether "progressives" are obliged to consider those criteria as determinative, or even important.

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Originally posted by M. Spector:
The fact that the Harper "plan" satisfies both your horizontal and vertical "equity" criteria is hardly the last word on the subject. It even begs the question as to whether "progressives" are obliged to consider those criteria as determinative, or even important.

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What about the Conservatives' proposal? Since it's available to all parents, it satisfies the horizontal equity criterion. And since the payments are all equal and all subject to the (progressive) income tax, it satisfies the vertical equity criterion as well.

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Originally posted by Stephen Gordon:
Indeed. So why would a progressive not wish to respect these criteria when making policy?

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Originally posted by Stephen Gordon:

Suppose that it's been decided that public funds should be use to help parents defray the costs of child care. How does the Quebec model fit in?

[...]

If the announced goal of a child-care policy is to help parents defray these costs, then according to the principle of horizontal equity, there's no reason for the government to choose to help one of these mothers and not the other.

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Originally posted by Stephen Gordon:
Huh? Equity is a false premise? Could you elaborate on why you think that the notions of horizontal and vertical equity don't apply here?

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Is this how you debate in the hallowed halls of academe?

The false premise, with the utmost of respect, and its ineluctably spurious conclusion, were the following:

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First, let's consider two individuals (in practice, invariably the mother), A and B. A and B are identical in every way that matters, except for one thing: A would prefer to stay home and raise her children, while B would prefer to work...

If the announced goal of a child-care policy is to help parents defray these costs, then according to the principle of horizontal equity, there's no reason for the government to choose to help one of these mothers and not the other. It turns out that the Quebec model fails this test: it chooses to help B, notwithstanding the fact that A and B are identical in every respect other than the choice of going to work or staying at home.

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No, sir, the "announced goal" which you proclaim is not the goal of progressive people. Their goal is decidedly not "freedom of choice" for mothers to sit at home and engage in drudgery while Hubby plies the world's oceans. It is to be equal (note the conceptual gap between my "equality" and your "equity"), the equality that can come only by being economically free to engage in all of society's challenges, unfettered by the chains of kitchen, nursery, and laundry room.

Let me be even more succinct:

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Originally posted by Stephen Gordon:
So your problem is with the horizontal equity principle; fair enough. How about the vertical equity issue?

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Here I partially agree. Publicly financed child care cannot, nor is it designed to, eliminate the social and economic inequality in society. Women from higher-income families have a better chance of finding higher-paying jobs on day shift? No doubt. But that becomes a challenge of how to provide child care for shift workers, which I would agree is absolutely essential.

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Originally posted by unionist:
The point is that publicly financed child care can address these problems, because the aim is to liberate women.

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Originally posted by Stephen Gordon:

Doesn't that amount to the same thing as making it easier to do what they want? What if they want to stay home?

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What if some people don't "want" to send their kids to school?

What is some people don't "want" to treat their medical problems through traditional medicine, but rather home cures, homeopathy, etc.?

What if some people don't "want" to use public transit, but prefer private means?

Should we give everyone cheques for $1,200 in lieu of building public schools, funding health care, building public transit? Now wouldn't that just be horizontally and vertically equitable?!

Non, merci.

A democratic and enlightened society allows people to do whatever they want (without intruding on others rights) -- but it makes social decisions about which choices it will encourage and which ones need special financing in order to be facilitated.

Thus, progressive people consider that society should encourage, and finance, the equality of women by opening up all possibilities to participate in the workforce (for example).

But my post was on the equity problems of the Quebec model.

Examining the disconnect between the interests of the working class and roles social support will provide Canadians in the near future is not a clear cut issue. Asking Canadians to continue to act as individuals has increasingly created new barriers. Solutions for daycare (and other social issues) will exist within the home, community, and the country. I believe a return to collective goals is required. Have employers and government continue to give out money to individuals is not addressing the underlying structural issues. The working class needs broader forms of support. Individual workers need to identify that income does not always have to come from your employer in the form of wages. Family and community supports have traditionally been a valuable source of support.

Nevertheless, I say sit back and enjoy the trip to Ikea. In the worst-case scenario will have no one to provide the service we need. Maybe then, we will spend more time with our kids.

The last sentence of the OP sums it up:

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But if progressives are looking for a better alternative that satisfies the basic criteria for equity, it shouldn't be looking at the Quebec model.

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I think Unionist makes a good point, that wise public policy might not be entirely neutral between "stay at home and mind the kids" and "enter the workforce". The former option excludes caregivers, largely women, from a significant social experience, and personal development.

Of course it is possible to watch the kids and develop oneself, but it is probably more isolating to do so, and less enriching.

I don't think we should make it IMPOSSIBLE to be a stay-at home Mom, but maybe there should be a gentle push towards workforce participation.

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Stephen's second point:

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The utilisation rates and subsidies received increase with income. It's not difficult to come up with some plausible explanations for why this would be the case:

- High-skilled women are more likely to choose to work than those with fewer skills.
- The daycare system is almost entirely designed for those with 9-to-5 jobs, the sort that low-income workers are less likely to have.

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If working women cannot choose the subsidized reentry into the workforce because of the design of the daycare system, then surely the daycare system should be revamped to allow them to do so.

My problem with the Harper plan is that it doesn't really address childcare at all, because it doesn't create daycare places, much less insure that they are available in the evening or at times when working class women need them.

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Originally posted by jeff house:
I don't think we should make it IMPOSSIBLE to be a stay-at home Mom, but maybe there should be a gentle push towards workforce participation.

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Originally posted by Stephen Gordon:

I would agree with that to a certain extent (and it wouldn't be hard to think up economic justifications), but that kind of bias should be made explicit and/or acknowledged, since it brings in an extra consideration other than child care. But it's not clear that this bias should take the form of shutting SAH moms out entirely.

And as for the vertical bias, I think a lot of it could be solved by tying fees to income. Personally, the $5/day (as it was at the time) was a financial windfall. But it really shouldn't have been; we should have been made to pay more so that someone with a lesser income could pay less, or to pay the extra costs of a more flexible system.

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1. Publicly funded child care is not primarily about giving children a more enriching and nurturing experience than they can get at home (although that should certainly be an objective). It is primarily about freeing parents from the home -- and mainly women. Harper will never acknowledge that explicitly, because he doesn't believe in it (as apparently you don't either) and as it would discredit his baby bonus scheme.

2. I can understand wanting to make sure that a policy benefits enough people so that it can get majority support, but that shouldn't extend to the point of defending regressive policies.

[ 15 June 2006: Message edited by: Stephen Gordon ]

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Originally posted by unionist:
1. Publicly funded child care is not primarily about giving children a more enriching and nurturing experience than they can get at home (although that should certainly be an objective).

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- The daycare system is almost entirely designed for those with 9-to-5 jobs, the sort that low-income workers are less likely to have.

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Thats the first time I've seen that arguement posed and haven't really considered that. A national daycare strategy would have to include daycare for families working evening and weekend shifts as well would it not?

Just to add another bit that Harper's plan includes (I didn't see mention of it here yet) is the corporate tax cuts to companies that create daycare spaces. Which once again hits the snag... I'm guessing most people working the 9-5 for some corporation will not fit into the 'poor' category, nor does it help anybody working night shifts.

In any of these models currently proposed out there... Is there a decent solution for parents who do not work the regular 9-5 style shift? Would universal daycare include 'evening care' for children of parents who work night shifts?

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Originally posted by M. Spector:
I disagree. Publicly-funded early childhood education should be seen as an extension of the public education system, albeit a non-compulsory one.

Many parents may disagree, but professional-quality care by qualified ECE specialists is in most cases far superior to the "babysitting" experience that most stay-at-home kids get.

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Originally posted by Stephen Gordon:
1. '[F]reeing parents from the home'? I don't understand how you can be so sure that no woman would ever freely choose to stay home.

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Sophistry. Let them all choose to stay at home. Child care is for those who want or need to work. I'm talking about the real life people out there, not the ones with the luxury to afford choices.

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2. I can understand wanting to make sure that a policy benefits enough people so that it can get majority support, but that shouldn't extend to the point of defending regressive policies.

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The issue that's perhaps not being looked at here is that of the financial capability of the state.

The single biggest complain against the Quebec daycare model in this province is that there are not enough spots for kids and as such whether or not you gain access to this social program depends a lot on luck. Is it really worth it to have such a program?

The single biggest complain against the conservative plan is that 1200$ is surely not enough for a day care plan; except for those who can already almost or barely afford it. Is it really worth it to have such a program?

Written by unionist:

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The way to address poverty is by addressing poverty. The way to address child care is by building a true child care infrastructure.

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Child care is for those who want or need to work.

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I thought that child care was for children.

[eta:] Repetition of the word 'sophistry' doesn't really count as a reply. Most mothers who stay at home are from lower-income households.

[ 15 June 2006: Message edited by: Stephen Gordon ]

My wife and I took a big pay cut to afford to have her stay home with our family. It is not easy, trust me. Despite the fact that she makes almost 2x what I make, she really wanted to be the one who stayed home. Would I have stayed home, sure, but she wanted to stay home. Key word, WANTED. Not only are we paying for it now, but we will continue to pay for it in years to come in the form of reduced savings and opportunity costs. I don't see our position as a luxury, and frankly it is frustrating when I hear people say things like that. Being told that my family and I are somehow not 'real life people', despite our financial and childcare challenges... is insulting.

Perhaps you might want to rephrase that piece.

[ 15 June 2006: Message edited by: lucas ]

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Originally posted by Stephen Gordon:

I thought that child care was for children.

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That is definitely sophistry.

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Repetition of the word 'sophistry' doesn't really count as a reply. Most mothers who stay at home are from lower-income households.

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Originally posted by lucas:
"...I'm talking about the real life people out there, not the ones with the luxury to afford choices..."

My wife and I took a big pay cut to afford to have her stay home with our family. It is not easy, trust me. Despite the fact that she makes almost 2x what I make, she really wanted to be the one who stayed home.

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So, congratulations -- I never proposed anything that would take away your choice as to how to raise your kids. You feel offended that I used the word "luxury".

Let me try some simple math based on your unsolicited income information:

Lucas earns X thousand per year.
Lucas's wife earned 2X thousand per year.
Lucas's household income used to be 3X thousand per year.
Today, however, the Lucas family is surviving on just Lucas's salary -- X thousand -- which is one-third of what the family income used to be.

Well, pardon me Lucas, but that tells me there's a lot more money in your household than my fellow union members. No one I know can take a 2/3 cut in their household income because one spouse chooses to stay at home!

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Originally posted by 500_Apples:
unionist, it could have been 50, 000 and 100, 000 a year; and 50, 000 a year is hardly luxury for a household, considering taxes are higher on single incomes than equivalent double incomes.

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Originally posted by Stephen Gordon:
Consider the case of a mother with few skills. Even if daycare were free, she may not decide that whatever income she could receive by working outside the home would be worth the trouble - particularly if the only sort of job she could get involved working irregular hours and/or shift work.

Why doesn't she deserve our help?

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She deserves lots of help -- publicly funded training, for example, at no cost, along with income support subsidies (through EI and similar programs). And once she has those skills, she will need child care so that she can actually get to work.

[ 15 June 2006: Message edited by: Lord Palmerston ]

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Originally posted by unionist:

She deserves lots of help -- publicly funded training, for example, at no cost, along with income support subsidies (through EI and similar programs). And once she has those skills, she will need child care so that she can actually get to work.

Your "help" to her would be to throw her $1200 and tell her to get back into the kitchen? Vertical, horizontal, diagonal? Sounds to me like her fate would be horizontal.

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My "help" would be to assist her in whatever she decides to do. I agree that offering more choices (training, etc) is a good thing. But even if she refuses to submit to your will and find a job outside the home, I still think she deserves our help.

[ 15 June 2006: Message edited by: Stephen Gordon ]

Professionals are not often said to "profess", they are said to work. You could say "practice," but that's not the daily language people use and doesn't really apply to scientists.

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Originally posted by Stephen Gordon:

But even if she refuses to submit to your will and find a job outside the home, I still think she deserves our help.

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You know, it's been ages since I heard the suggestion that real women just want to stay at home with the kids, but lefty intellectual feminist types are trying to push them into the workforce against their will. Oh, and the ones that do work, it's for the "pin money".

Thanks for bringing back old memories...

Reality Check

Some people are far removed from the Great Unwashed, so let's let them in on the dirty little secret about how much Canadians earn.

I took the City of Toronto (so as not to be accused of slumming), in 2001 -- last census stats available.

Our of 943,075 households reporting, the average household income was $69,125. But that's distorted by the very wealthy. A more accurate picture is given by the median household income -- which was $49,345.

In 2006 dollars, that median income would $55,110.40.

Sources:

City of Toronto website based on Statistics Canada 2001 census data

and

Bank of Canada Inflation Calculator

So, if a middle-range family in Toronto wanted to keep a spouse at home earning twice what the other earned, they would have to support the kiddies and themselves on $18,370 per year.

[ 15 June 2006: Message edited by: Stephen Gordon ]

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Originally posted by Stephen Gordon:
I don't understand how refusing to conform to your standards of correct behaviour is reason enough to deny them access to public funds.

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Babblers know how to scroll up, a skill which will defeat your sophistry.

I never said women or men or anyone should join the workforce. Not once. Why would I care?

I answered your diversionary question about the poor woman with no skills who "chooses" to stay at home and how society should give her lots of money -- to provide her with the skills she lacks, if she so chooses.

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Originally posted by Stephen Gordon:
Why are data from Toronto relevant in a discusssion of Quebec's daycare system? The relevant data are cited in the OP.

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Are you serious? I took the richest urban area to not skew my point -- to give the best possible credit to 500_Apples's thesis. In 2000, Toronto had the highest median household income of 13 Census Metropolitan Areas. It exceeded the average by 27%, at $59,502. Note the divergence from my previous post, because that was the City of Toronto, while this is the (pre-amalgamation) greater urban area, including the wealthier suburbs.

The lowest was -- you guessed it (or did you??) -- Montreal, at $42,123. Yup. In today's dollars, that's $47,044.59.

Source:
Toronto Urban Development Resources: Policy and Research, September 2004

[ETA:] Conclusion: If Lucas's family was a mid-range family living in Montreal, it would have the monarch's ransom of $15,681.53 in current dollars to live on each year.

[ 15 June 2006: Message edited by: unionist ]

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Originally posted by Stephen Gordon:
Mulberry-bush time.

You need to explain why staying at home is a Bad Choice; one that in and of itself deprives the mother of public support. If your claim is that the only parents who make this choice are the Undeserving Rich, my reading of the evidence suggests otherwise.

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Are you having fun? Stay-at-home parents deserve lots of public support. Staying at home is a wonderful thing for those who can afford it. The only thing the mother does not get is child care support -- because she doesn't use child care.

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Originally posted by Stephen Gordon:
You're not paying attention: stay at home moms in Quebec are overwhelmingly from the lower end of the income distribution.

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You're not paying attention: they're staying at home because they can't get decent well-paying jobs, and because even with Québec's program, there is a need for more child care spaces.

Oh, and one more fact which a visit to real life should tell you:

The main reason that "stay at home moms in Québec are overwhelmingly from the lower end of the income distribution" is that Québecois as a whole are "overwhelmingly from the lower end of the income distribution". Did you stop and look at the median household income in Montréal of $47,044.59 (in today's dollars)? Which end of the distribution does that put the overwhelming majority of the people at?

[ 15 June 2006: Message edited by: unionist ]

I've had enough. You don't seem to have any point aside from the unsubstantiated claim that Real Women Choose to Work Outside the Home, and now you've wandered into the realm of irrelevant factoids.

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Originally posted by Stephen Gordon:
Gaah. Grenier only looked at Quebec data. But you'd know that if you ... Oh. You didn't read it.

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Ok. Look at page 111, last paragraph. I quote:

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Quand on regarde la distribution de façon nette, en incluant les contributions (impôts et tarifs) et l'ensemble des aides à la famille, l'effet net est positif, quels que soient le revenu ou le type de la famille. Il s'opère donc une redistribution horizontale de l'ensemble des contribuables vers les familles avec enfants en bas âge. L'ensemble des mesures profitant, au total, plus aux familles à faible revenu, on peut le juger progressif du point de vue vertical.

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My amateurish translation:

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When we look at the distribution on a net basis, inclusive of income and other taxes as well as all forms of family assistance, the net effect is positive, irrespective of family type or income. What is happening therefore is a horizontal redistribution from taxpayers as a whole towards families with young children. Given that all these measures, taken together, are more advantageous to low-income families, we can qualify it as progressive from the vertical standpoint.

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[My emphasis throughout]

[ 15 June 2006: Message edited by: Stephen Gordon ]

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Originally posted by Stephen Gordon:
Yes. And the reason is that the income tax system is progressive. If you do the same exercise, you'd find that the Conservative plan is even more progressive than the Quebec model, since its subsidies don't increase with income.

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Yeah. The only small difference is that the Harper plan doesn't create one single child care space.

Child care funding is not about income redistribution -- even though your friend Grenier seems to conclude that it plays a positive role in that as well! Child care funding is about creating affordable child care facilities and spaces. Income tax policy can be a tool of wealth redistribution (among others).

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Originally posted by unionist:
but if you truly believe that quality early childhood education is the primary driver of socialized child care, then you will hand an easy win to the enemies of this program. Now you have to argue that the caregivers are better for the kids than their mothers. What a trap! Walk away from it!

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All I'm doing is extending that to earlier ages, and saying that, in general, a three-year-old toddler will develop better in a professional child care setting than she will at home.

I think if you are going to argue for universally accessible daycare you have to be able to meet the right-wing argument that says: "Small kids are better off in the care of their parents (read: mothers), so why should the well-being of children take a back seat to the selfish desires of some parents (again read: mothers) to dump their kids in daycare so they can go out and pursue their careers?"

Our slogan must be: "Child care is about work/home choice for parents and affordable universal quality care for children."

Babblers: What do you think?

[ 15 June 2006: Message edited by: unionist ]