Subsidized Childcare and the Labor Market for Providers | WIP Seminar with Kourtney Koebel

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Abstract: We (co-author: Xiner Xu) analyze the impact of universal childcare in Quebec on the labor market for caregivers. Using Canadian Census data and administrative reports containing information on daycare spaces within Quebec, we find that the policy roll-out coincided with a sharp decline in provider qualifications, offering a potential explanation for the negative effects of the program on children documented in previous studies. Contrary to concerns that government monopsony power would dampen wage growth, hourly earnings increased significantly for center-based providers, who were generally covered by the subsidy. However, wages for home-based providers, who were largely unsubsidized, remained flat, or declined in regions that experienced a rapid expansion in regulated care. We also find that this latter group increasingly served lower-income families, raising concerns about unequal access to high-quality care.

Kourtney Koebel is a PhD graduate of the Centre for Industrial Relations and Human Resources at the University of Toronto. Here research interests include labour markets and social policy, as well as poverty alleviation strategies. Her current research involves evaluating the labour supply effects of the Working Income Tax Benefit (WITB) using applied econometrics and bridging together different schools of thought on how we formally think about, and conceive of, the broad concept of “work”. She has also worked on several projects related to the concept of a basic income guarantee (BIG), including the design and financing of a BIG in Canada, as well as the political feasibility and framing of such a policy. This work includes simulating a revenue-neutral basic income and examining the static effects it could have on the poverty rate and distribution of income in Canada.