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GGG · 03-26-2019, 06:53 AM

I think need is quite easy to assess, you just have to divide what the goal of the program is and the threshold that it delivers the most value.

If you goal is to increase labour participation then you want to make the decision to go back to wrk make more sense. So after tax income of the lower earner vs daycare cost would be the metric.

So if someone earning 60K before taxes earns about $240 per day. After tax probably about $180. So set a threshold for daycare fees of say 33% of after tax income. So this person would pay $60 per day for 1,2 or 3 kids.

The engineer making 150k gets nothing because they can easily afford it. Then you could apply a lower threshold for single parents.

If the goal is making the choice easier to increase labour participation then it should be targeted at making the choice make sense. If the income of the second job is too low that person should open a daycare. If high enough that the dollars aren’t the driver of the decision then we shouldn’t waste money on a subsidy.

03-26-2019, 06:53 AM	#417
GGG Franchise Player Join Date: Aug 2008 Location: California Exp:	I think need is quite easy to assess, you just have to divide what the goal of the program is and the threshold that it delivers the most value. If you goal is to increase labour participation then you want to make the decision to go back to wrk make more sense. So after tax income of the lower earner vs daycare cost would be the metric. So if someone earning 60K before taxes earns about $240 per day. After tax probably about $180. So set a threshold for daycare fees of say 33% of after tax income. So this person would pay $60 per day for 1,2 or 3 kids. The engineer making 150k gets nothing because they can easily afford it. Then you could apply a lower threshold for single parents. If the goal is making the choice easier to increase labour participation then it should be targeted at making the choice make sense. If the income of the second job is too low that person should open a daycare. If high enough that the dollars aren’t the driver of the decision then we shouldn’t waste money on a subsidy. Last edited by GGG; 03-26-2019 at 07:03 AM.