Q: Why do we subsidise childcare for people?
Because, those "people" are mainly women who, having children when their careers are at a (relatively) early stage, and thus not that well-paid, will find that, without subsidy, they are financially better off giving up work.
In the short-term, this makes sense.
However, looked at long-term, it is bad, bad, bad. The time off turns into a loooong career gap, maybe as much as 10 years. And their "careers" are shafted, basically.
With subsidy, women (and it is mainly women, because they traditionally earn less and so are the ones who give up the job if childcare is too pricey) may be able to take pat-time work (keeping a foot in the door) or f.t. work.
Their pay takes less of a hit, they stay in the labour market, they pay taxes (presumably at a higher level than those who ventured back to work after that big gap) -- and, in theory, everyone's happy.
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I think we all knew this was on the cards. I know of a few schools that didn't bring in after-school clubs at all because it would have left them with white elephant buildings when the subsidies were withdrawn.