Quote:
Originally Posted by bizaro86
The thing about cheap daycare lowering wages wasn't my assertion, but I could see how that might be possible.
I know a number of families who have chosen to have one parent stay at home with children after determining their net wages after the cost of childcare weren't sufficient. If childcare was extremely cheap, that calculation would shift, and more parents would enter the workforce. The greater supply of labour would change the labour market equilibrium, lowering wages.
I can't prove that, but it makes sense. It doesn't account for 2nd order effects, obviously, and wouldn't be a $1 for $1 offset, but it'd be something.
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Right, but it would add an extra income to the province's fiscal capacity calculation, so for the purposes of equalization, it would actually raise a province's "income" (which, again, is what one would expect).