1 thought on “Government subsidies have made our childcare sector even more dysfunctional”

  1. Posted 22/06/2018 at 12:40 | Permalink

    Addendum to this: the childcare case shows what can happen when you provide something’free’ and then have to put a price cap on it.
    A similar case is care homes. However there the adverse consequences have taken a different form. Giulia Giupponi and Stephen Machin report on the consequences of introducing the National Living Wage (https://www.iza.org/de/publications/dp/11474/changing-the-structure-of-minimum-wages-firm-adjustment-and-wage-spillovers?mc_cid=3efa2bf3bc&mc_eid=99b781b0ac). Here wages and employment did not fall over the period they consider, but more worryingly there was a significant reduction in quality of service as shown by the reports of the regulator.

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