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Private Demand for Child Care

Implications for Public Policy

University of South Carolina

The dramatic secular increase in the labor force participation of women with preschool children has led to arguments for some type of federally subsidized system of day care centers. In order to analyze the need for federal action several studies of the demand for different modes of childcare by households of different socioeconomic characteristics are critically reviewed here. These studies indicate that a family's income has little effect on modal choice and most working mothers choose at-home care for economically rational reasons. The economic arguments for federal intervention m the child care market are discussed and analyzed. The weight of the evidence indicates that the case for a public role in this market is weak as the private sector is now providing the child care arrangements households demand.

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