The child care system in the United States is widely criticized, yet the underlying structural problems are difficult to pin down. In The Child Care Problem, David M. Blau sets aside the often emotional terms of the debate and applies a rigorous economic analysis to the state of the child care system in this country, arriving at a surprising diagnosis of the root of the problem.

Blau approaches child care as a service that is bought and sold in markets, addressing such questions as: What kinds of child care are available? Is good care really hard to find? How do costs affect the services families choose? Why are child care workers underpaid relative to other professions? He finds that the child care market functions much better than is commonly believed. The supply of providers has kept pace with the number of mothers entering the workforce, and costs remain relatively modest. Yet most families place a relatively low value on high-quality child care, and are unwilling to pay more for better care. Blau sees this lack of demand—rather than the market's inadequate supply—as the cause of the nation's child care dilemma. The Child Care Problem also faults government welfare policies—which treat child care subsidies mainly as a means to increase employment of mothers, but set no standards regarding the quality of child care their subsidies can purchase.

Blau trains an economic lens on research by child psychologists, evaluating the evidence that the day care environment has a genuine impact on early development. The failure of families and government to place a priority on improving such critical conditions for their children provides a compelling reason to advocate change. The Child Care Problem concludes with a balanced proposal for reform. Blau outlines a systematic effort to provide families of all incomes with the information they need to make more prudent decisions. And he suggests specific revisions to welfare policy, including both an allowance to defray the expenses of families with children, and a child care voucher that is worth more when used for higher quality care.

The Child Care Problem provides a straightforward evaluation of the many contradictory claims about the problems with child care, and lays out a reasoned blueprint for reform which will help guide both social scientists and non-academics alike toward improving the quality of child care in this country.

DAVID M. BLAU is professor economics at the University of North Carolina, Chapel Hill.

Winner of the 2002 Richard A. Lester Prize for Outstanding Book in Labor Economics and Industrial Relations

Throughout the latter part of the 20th century, the U.S. labor market performed differently than the labor markets of the world's other advanced industrialized societies. In the early 1970s, the United States had higher unemployment rates than its Western European counterparts. But after two oil crises, rapid technological change, and globalization rocked the world's economies, unemployment fell in the United States, while increasing dramatically in other nations. At the same time, wage inequality widened more in the United States than in Europe. In At Home and Abroad, Cornell University economists Francine D. Blau and Lawrence M. Kahn examine the reasons for these striking dissimilarities between the United States and its economic allies.

Comparing countries, the authors find that governments and unions play a far greater role in the labor market in Europe than they do in the United States. It is much more difficult to lay off workers in Europe than in the United States, unemployment insurance is more generous in Europe, and many fewer Americans than Europeans are covered by collective bargaining agreements. Interventionist labor market institutions in Europe compress wages, thus contributing to the lower levels of wage inequality in the European Union than in the United States.

Using a unique blend of microeconomic and microeconomic analyses, the authors assess how these differences affect wage and unemployment levels. In a lucid narrative, they present ample evidence that, as upheavals shook the global economy, the flexible U.S. market let wages adjust so that jobs could be maintained, while more rigid European economies maintained wages at the cost of losing jobs.

By helping readers understand the relationship between different economic responses and outcomes, At Home and Abroad makes an invaluable contribution to the continuing debate about the role institutions can and should play in creating jobs and maintaining living standards.

FRANCINE D. BLAU is Frances Perkins Professor of Industrial and Labor Relations, and LAWRENCE M. KAHN is Professor of Labor Economics and Collective Bargaining, School of Industrial and Labor Relations, Cornell University.

"David Blau has chosen seven economists to write chapters that review the emerging economic literature on the supply of child care, parental demand for care, child care cost and quality, and to discuss the implications of these analyses for public policy. The book succeeds in presenting that research in understandable terms to policy makers and serves economists as a useful review of the child care literature....provides an excellent case study of the value of economic analysis of public policy issues." —Arleen Leibowitz, Journal of Economic Literature
 
"There is no doubt this is a timely book....The authors of this volume have succeeded in presenting the economic material in a nontechnical manner that makes this book an excellent introduction to the role of economics in public policy analysis, and specifically child care policy....the most comprehensive introduction currently available." —Cori Rattelman, Industrial and Labor Relations Review

DAVID M. BLAU is Norman Johnson Professor of Economics at the University of North Carolina at Chapel Hill, and fellow of its Carolina Population Center.

Over the last three decades, large-scale economic developments, such as technological change, the decline in unionization, and changing skill requirements, have exacted their biggest toll on low-wage workers. These workers often possess few marketable skills and few resources with which to support themselves during periods of economic transition. In Working and Poor, a distinguished group of economists and policy experts, headlined by editors Rebecca Blank, Sheldon Danziger, and Robert Schoeni, examine how economic and policy changes over the last twenty-five years have affected the well-being of low-wage workers and their families.

Working and Poor examines every facet of the economic well-being of less-skilled workers, from employment and earnings opportunities to consumption behavior and social assistance policies. Rebecca Blank and Heidi Schierholz document the different trends in work and wages among less-skilled women and men. Between 1979 and 2003, labor force participation rose rapidly for these women, along with more modest increases in wages, while among the men both employment and wages fell. David Card and John DiNardo review the evidence on how technological changes have affected less-skilled workers and conclude that the effect has been smaller than many observers claim. Philip Levine examines the effectiveness of the Unemployment Insurance program during recessions. He finds that the program’s eligibility rules, which deny benefits to workers who have not met minimum earnings requirements, exclude the very people who require help most and should be adjusted to provide for those with the highest need.  On the other hand, Therese J. McGuire and David F. Merriman show that government help remains a valuable source of support during economic downturns.  They find that during the most recent recession in 2001, when state budgets were stretched thin, legislatures resisted political pressure to cut spending for the poor.

Working and Poor provides a valuable analysis of the role that public policy changes can play in improving the plight of the working poor. A comprehensive analysis of trends over the last twenty-five years, this book provides an invaluable reference for the public discussion of work and poverty in America.

REBECCA M. BLANK is codirector of the National Poverty Center and dean of the Gerald R. Ford School of Public Policy, Henry Carter Adams Collegiate Professor of Public Policy, and professor of economics at the University of Michigan.

SHELDON H. DANZIGER is Henry J. Meyer Distinguished University Professor of Public Policy and codirector of the National Poverty Center at the Gerald R. Ford School of Public Policy at the University of Michigan.

ROBERT F. SCHOENI is research associate professor at the Institute for Social Research, associate professor of Economics and Public Policy, at the University of Michigan.

CONTRIBUTORS: David Autor, George J. Borjas, Maria Cancian, David Card, Kerwin Kofi Charles, John DiNardo, Robert W. Fairlie, Eric French, Steven J. Haider, Robert E. Hall, Kevin A. Hassett, Susan Houseman, Phillip B. Levine,  Helen Levy, Rebecca A. London, Bhashkar Mazumder, Kathleen McGarry, Therese J. McGuire, David F. Merriman, Daniel R. Meyer,  Anne Moore, Heidi Shierholz,  Melvin Stephens Jr., Christopher Taber.

A Volume in the National Poverty Center Series on Poverty and Public Policy