Clinton offers to subsidize child care, and Trump - parenthood.

Why subsidize childcare? The most popular explanation is that it will allow parents to work more.

Child care is very expensive - so much so that sometimes parents, mainly mothers, are better off staying home with their children rather than going to work. “In this country, the wage gap is no longer determined by the gender of the employee; it is determined by whether you are a mother or not,” Ivanka Trump said at the Republican National Convention, announcing her father’s plan to subsidize child care, similar to Clinton’s.

At first glance, the economic rationale for subsidizing childcare is a bit uncertain. If the potential salary of the mother responds to its productivity, and the cost of caring for children responds to the cost of providing these services, then there is no economic damage if the mother decides to stay with the child at home.

Here is a simple example: suppose a low-skilled worker can either go to a position with a minimum salary at Walmart, while paying another low-skilled worker to take care of his child, or he can stay at home and raise a child. If the mother stays at home, the second low-skilled worker will go to work at Walmart. Whatever she decides, one of them will look after the child, the second will work at Walmart. There is no economic benefit to swap them.

Even if a woman is a highly qualified specialist, which makes her better to work than to save on childcare costs, the difference between her salary and the cost of caring for a child reflects the benefits for the economy if she chooses a job. She is interested enough even without stimulation from the government.

Of course, economic reality is much more complicated. Mothers cannot fully take into account the effect of a work break on their future salaries. There are also other benefits from reducing the cost of having children, not least the fact that these children grow up, work and pay taxes.

But why not just subsidize parenting more, for example, providing a greater tax credit for a child? The money saved parents can always spend on childcare, if they wish. The main effect of the elimination of child care is social. If gender norms force mothers, more than fathers, to stay at home, then subsidies for childcare may prove to be liberating for them. Such a paternalistic (or rather, “materialistic”) approach shows that women make the wrong choice that needs to be corrected with financial incentives.

If this is what we want to achieve, then the Hillary Clinton plan is more effective than the Donald Trump plan. First, he is more generous. Clinton promises that no family will have to pay more to care for their children than 10% of their income. True, she does not quite understand how she is going to do this. But if the Clinton administration simply pays the cost of caring for a child that exceeds 10% of income, then the state will have to pay children's bills for many, especially the poor, families. 10% of average income is about $ 5 700, while the cost of caring for an infant is about $ 12 000 per year (these are average numbers, and this depends on the region - richer parents require more sophisticated nanny services).

Unlike Clinton, Trump will allow families to deduct the cost of childcare from their taxes, up to the average cost of such services in their area. This is not so generous for low-income families, since they already pay low income taxes and, accordingly, will benefit less from tax rebates. However, this approach is more effective. If Clinton pays the bills for the babysitter, parents may be tempted to use more expensive services (Trump's plan also encourages higher costs, but not so much). And fixing the maximum costs at 10% income also means an increase in indirect taxes on 10%, because on every dollar earned, 10 cents of your subsidy are lost.

More generally, Trump's plan does not encourage going to work instead of raising their children at home. This is because he promises "to ensure that parents raising their children at home have the same tax benefits as working parents." If mothers benefit, whether they work or hire someone to care for their children, their benefits do not change. There is no incentive against gender norms. Trump's policy will actually subsidize parenting, not childcare.

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