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Increasing Child Care Costs: Finding the Solution

There is a positive correlation between the costs and quality of child care services provided and the employment rate among women. Single mothers, as the most economically vulnerable part of population, are the most sensitive to child care costs. Even though federal government is undertaking steps to increase financing of child care services, it is unable to cover the needs of parents, who fall under the criteria to receive financial support. Going even further then this, while the employment rate is relatively elastic to child care costs, when it comes to speaking about financial support offered by government, funding must be increased by as much as 50 per cent to bring fruitful results. As such, federal spending on child care services proves to be relatively inefficient. At the same time, many mothers choose to remain unemployed due to other problems with child care services such as uncertainty in the quality of services received or choose to compromise entering low paid jobs with adjusted schedule. As such, governmental role in setting standards for child care services provided can hardly be overestimated. Consequently, solution to the problem must be complex that involves both private and public sectors.

To find a solution to the problem, one should start from a basic decision making model of a mother. In the model, it is assumed that mothers of children are seeking utility maximization through child services and goods, which are, in its turn, a subject to four major constraints: a money constraint that combines both labor and non-labor income; a production function of child care services, such as quality of it and the perspectives opened by it; childs time constraint and, finally, mothers time constraint. As such, solution to the problem should consider the stated above factors in order to maximize the utility and in such way decrease the barriers of entry into the labor market of single mothers. The solution should address all four critical factors in order to be effective for single mothers, as for one of the most vulnerable groups of population. The solution must be a combination of cost minimization approach, which could be realized through transfer to the free market of the child care sector. The solution should also increase the level of certainty among mothers and deliver quality work, which could be realized through governmental control by setting the standards of services delivered. Finally, the solution should consider the age of the children, as the major determinant of the time constraint of both mother and child.

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