The debate over for-profit child care heats up

by John Geddes,

In debates over how to provide care—whether in hospitals, seniors’ residences or daycare centres—clashes along the border between not-for-profit and for-profit services are particularly ferocious.

For free-market types, it’s axiomatic that injecting competition into the system should boost choice and, as a result, quality and efficiency. For social democrats, it’s equally self-evident that profit-seeking providers are more likely to sacrifice standards, especially by hiring fewer and less-qualified staff, than the not-for-profits.

… Toronto-based Childcare Resource and Research Unit’s new report flagging, with some alarm, the rise of for-profit daycare. For-profit spaces grew to 28 per cent of those available in Canada in 2010, up from 20 per cent in 2004. …

My inclination, for what it’s worth, is that policy should support choice and variety in the pre-school years, while means-tested subsidies for care should flow to low-income parents. As well, I think research that raises concerns about daycare (like this report on less-than-stellar results from Quebec’s generous system) deserves close attention….

For instance, a study published last year in the Journal of European Social Policy usefully surveyed the cautionary experiences of Sweden, Britain and Australia, as all three countries moved toward more for-profit care in recent decades, with uneven results.

The paper, jointed authored by British, Swedish and Australian academics, is called “The marketisation of care: rationales and consequences in Nordic and liberal care regimes.” It looks at what happened after social-democratic Sweden extended taxpayer subsidies to for-profit child-care providers for the first time in 1991; the Brits used tax credits to spark a 70 per cent increase in for-profit child care between 2002 and 2010; and Australia introduced a voucher system that helped child-care businesses expand starting in the 1990s.

These are complex stories that followed very different paths. Still, the report points to a raft of findings that suggest market forces failed in all three countries to reliably boost quality. It cites three UK studies that rated not-for-profit child care run by local authorities better than for-profit providers, including a big 2007 study, which tracked 19,000 children born in 2000-2001, and concluded that the non-profits offered “higher quality provision in almost all dimensions measured.”

An Australian study rated non-profits top, independent for-profits second, and corporate for-profits at the bottom. In Sweden, staff qualifications, notably the number of pre-school teachers with university degrees, is lowest in for-profit child care centres….

Policy needs to follow the evidence….

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