The left's fuzzy math on child care subsidies

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Article Highlights

  • The way gross domestic product is calculated doesn't include the value of household production.

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  • The shift from in-home to paid employment increased GDP but reduced the value of home production.

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  • I'm for making child care easier for families, by letting parents keep more of their tax dollars to use on that or any other purpose.

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A recent study from the Center for American Progress, a liberal research group, says that the economy would be 11 percent smaller if women worked outside the home at the same rate as they did in the late 1970s.

Bryce Covert, the center's economic-policy editor, argues that subsidized child care would increase women's participation in paid employment even more. And (indirectly citing other work) she says that if women were represented in the workforce at the same rate as men, the economy would be 5 percent larger.

It stands to reason that more people in the paid workforce will make for a larger economy. These numbers, though, probably overestimate how much Americans' livelihoods have improved -- and how much they would improve if women worked more hours outside their homes.

The way gross domestic product is calculated doesn't include the value of household production: the value of unpaid cooking, cleaning, child care and related services in the home. (Pay someone to do it, and it gets counted.) But that value is substantial. One study found that GDP would be 26 percent higher today if such work was figured in, and it would have been 39 percent higher in 1965.

The shift from in-home to paid employment increased GDP but reduced the value of home production. You'd have to net the figures to determine the total effect on living standards. And you'd have to do a similar calculation to determine if higher child-care subsidies would do more than just shift production from the home to the workplace.

I'm for making child care easier for families, by letting parents keep more of their tax dollars to use on that or any other purpose. But if parents could use the money as they like, some of them will use it to reduce hours away from home.

We should remember that GDP isn't everything, especially when it comes to these issues.

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