As the United States and other countries consider ways to address childcare challenges for working parents, new research urges caution regarding potential government interventions to finance the cost.
In a study recently published in the Journal of Economic Dynamics and Control, Loris Rubini, an associate professor of economics at the UNH Peter T. Paul College of Business and Economics, uses Chile’s government-mandated policy as a cautionary tale of how a measure intended to help women instead pushed the cost to their employers and led to hiring discrimination and lower wages.
The research found that women in Chile are better off financially without a mandated policy and would benefit more if an income tax was spread among the entire workforce. While the research focuses on Chile, Rubini says it serves as a reminder that assisting with childcare costs is complex.
“Whenever we consider these policies, we need to figure out the costs and who pays for them,” says Rubini. “Not only the monetary costs, but there could be costs for some groups more than others. There are always tradeoffs.”
Read the full UNH Today article here
