Edward Conard

Top Ten New York Times Bestselling Author

  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “…a very valuable contribution.” - Larry Summers, former Secretary of the Treasury and director of the National Economic Council, president emeritus, Harvard University
  • “Unintended Consequences is far smarter and more thought-provoking than most economics written for the general public” - Greg Mankiw, Harvard University, Former Chairman of the Council of Economic Advisors
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “Unintended Consequences is full of substance, it is one of the must-read books of the year, and once I finish it I will be giving it a second read through right away.” - Tyler Cowen, Professor, George Mason University
  • “…a fresh argument for the productive value of inequality.” - David Autor, Professor of Economics, Massachusetts Institute of Technology
  • “…a must-read for serious students of economic policy.” - Glenn Hubbard, Dean, Columbia Business School, and former Chairman of the Council of Economic Advisers
  • “…reminds us that inequality sends a signal of what society lacks most, in America’s case, entrepreneurship and risk taking.” - Lawrence Lindsey, CEO, The Lindsey Group, former Director of the National Economic Council
  • “…challenges misconceptions that distort our economic debates.” - Arthur Brooks, President of the American Enterprise Institute
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “…a comprehensive explanation of the modern economy.” - Julian Robertson, Founder, Tiger Management
  • “A full-throated defense of economic dynamism.” - The Wall Street Journal
Upside of Inequality Oxford Unintended Consequences

AI Summary. Fully closing Social Security's funding gap by raising the payroll tax rate would require an immediate, permanent increase from 12.4% to 17.6%, which would reduce labor supply and economic growth. Research on a prior benefit cut found affected Americans raised earnings by 61 cents per dollar of lost benefits, generating additional payroll tax revenue.

Andrew Biggs American Enterprise Institute
Date Posted:
Is Database:
Database
Is Important:
Important

Biggs argues that “fair” approaches to restoring Social Security solvency – those that do not cut already accrued benefits – are less effective than “unfair” ones that do, because the latter incentivize increased work effort, raising growth and revenue.

Does closing Social Security's gap with higher payroll taxes hurt growth?

Core argument: Keeping Social Security permanently solvent under the "fairness" model of paying accrued benefits in full would require an immediate and permanent payroll tax increase from 12.4% to 17.6%, which would decrease labor supply and reduce economic growth.

Imagine that Social Security reform follows the fairness model, in which accrued benefits are paid in full but the rate at which future benefits are earned is reduced. A simple way to do this is to increase the payroll tax rate To keep Social Security permanently solvent, meaning through 75 years and beyond, would require an immediate and permanent increase in the payroll tax rate [from] 12.4% to 17.6%. The higher rate would decrease labor supply and reduce economic growth. [Consider] an alternate reform, which looks clearly unfair: fix Social Security’s funding gap entirely by reducing accrued benefits that Americans already have earned. As of 2025, Americans had accrued $54 trillion in Social Security benefits. Social Security’s unfunded obligation as of 2025 was $26 trillion. So, roughly, this means cutting Americans’ “earned benefits” in half. [Analyzing the 1977 reform that undid the notorious 1972 “double-indexing” of benefits, a group of economists], using SSA earnings data, found that, for every dollar of lost benefits, the affected Americans increased their earnings by 61 cents. Moreover, these additional earnings would be taxed by Social Security, further strengthening the program’s finances. In effect, this makes cutting benefits a “cheaper” way to fix Social Security than raising taxes, because people respond in ways that also increase tax revenues.

Takeaways by Macro Roundup® AI

  1. Keeping Social Security permanently solvent under the "fairness" model of paying accrued benefits in full would require an immediate and permanent payroll tax increase from 12.4% to 17.6%, which would decrease labor supply and reduce economic growth.
  2. Americans had accrued $54 trillion in Social Security benefits as of 2025 against an unfunded obligation of $26 trillion, so closing the gap solely by cutting already-earned benefits would mean roughly halving those benefits.
  3. Economists analyzing the 1977 reform that undid the 1972 "double-indexing" of benefits found, using SSA earnings data, that affected Americans raised their earnings by 61 cents per dollar of lost benefits, earnings that Social Security would tax.

Related Articles:

  • Social Security and Trends in Wealth Inequality — The authors estimate that including Social Security in household wealth leaves top wealth shares little changed over three decades, with the top 10% and top 1% shares rising 1.1 and 1.6 percentage points versus roughly 9 and 6 points for marketable wealth alone. Social Security wealth grew from $7tn to $39tn.
  • How Federal Spending is Distributed by Age — An analysis classifying $4.4tn of $7tn in federal spending by age finds retirees aged 65 and older receive $2.7tn, 38.6% of total outlays and 61.9% of age-assignable spending, versus $1.2tn for working-age adults and $449bn for those under 26. Social Security and Medicare account for 80% of age-assignable spending on older adults.
  • The Great “Transfer”-mation — Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.

AI Summary. Sweden has opened public services to private providers, with nearly half of primary healthcare clinics privately owned and one in three public high schools privately run, up from 20% in 2011. Its public social spending has fallen to 24% of GDP, similar to the US and below the over 30% in France and Italy.

Tom Fairless Wall Street Journal
Date Posted:
Is Database:
Database

Swedish public social spending is now 23.7% of GDP, just 1pp above that of the US and well under France’s 31.6%. Market-based reforms in the 1990s brought overall government spending down from 69.4% to 49.3% in 2024.

How has Sweden shrunk its state by privatizing public services?

Core argument: Sweden's total public social spending, covering healthcare, education and welfare payments, has fallen to 24% of GDP, similar to the U.S. and well below the over 30% of nations like France and Italy.

For decades, Sweden was shorthand for the brand of high-tax, high-spend government that managed people’s lives from cradle to grave through state-run hospitals, schools and care homes. No longer. With little fanfare, this Nordic country of 11 million has embraced capitalism. Today, nearly half of primary healthcare clinics are privately owned, many by private-equity firms. One in three public high schools is privately run, up from 20% in 2011. School operators are listed on the stock exchange. The capitalist makeover has allowed Sweden to do what few industrialized countries have managed in recent years: shrink the size of the state. That has enabled the government to sharply lower taxes and, economists say, sparked a surge in entrepreneurship and economic growth. Its total public social spending bill—which includes healthcare, education and all welfare payments—has fallen to 24% of gross domestic product, similar to the U.S. and well below the over 30% for nations like France and Italy. Sweden’s economy is expected to grow by around 2% a year through 2030, roughly the same pace as the U.S. and double the growth rates of France and Germany, according to an April forecast by the International Monetary Fund.

Takeaways by Macro Roundup® AI

  1. Sweden's total public social spending, covering healthcare, education and welfare payments, has fallen to 24% of GDP, similar to the U.S. and well below the over 30% of nations like France and Italy.
  2. Nearly half of Sweden's primary healthcare clinics are privately owned, many by private-equity firms, and one in three public high schools is privately run, up from 20% in 2011, with school operators listed on the stock exchange.
  3. An April forecast by the International Monetary Fund projects Sweden's economy will grow around 2% a year through 2030, roughly matching the U.S. and double the growth rates of France and Germany.

Related Articles:

  • How Sweden Overcame Socialism — After government spending reached 70% of GDP and public debt 80% of GDP, Sweden adopted market-oriented reforms including privatized healthcare services, for-profit schools, reduced welfare benefits, deregulation of electricity and transportation, and a corporate tax cut from 28% to 22%. Public debt has since fallen to 41% of GDP, with growth outpacing European Union peers by roughly 1 point annually.
  • Reforming the Welfare State: Recovery and Beyond in Sweden — Sweden's structural reforms — flexible exchange rates, inflation targeting, a smaller public sector, less generous social insurance, and deregulated markets — accompanied export-led growth, a current account surplus lasting over a decade, government spending falling to 52% of GDP, and central government debt dropping from nearly 80% of GDP to about half that.
  • The US Has One of the Highest Fertility Rates Among Peer Countries — The tempo-adjusted fertility rate, which accounts for shifts in the timing of births, shows the US rate falling since roughly 2009-10 and dropping below the 2.1 births-per-woman replacement level around 2017, reaching 1.82 in 2022. The US decline is less severe than in many peer countries.

AI Summary. The share of the US population receiving food stamps doubled from 6% to 12% over roughly 25 years, with real costs per capita rising 179% to $279 a year, though both remain below their post-Great-Recession peak. Households with an elderly person now outnumber those with a child, reversing the early-2000s pattern.

Angela Rachidi American Enterprise Institute
Date Posted:
Is Database:
Database

About 40mm Americans, 12% of the population, receive SNAP benefits, up from 6% in 2000. In 2023, only 34% of these households included children, down from 49% in 2010, while 36% contained an elderly person, up from 16% in FY2010.

How have food stamp enrollment, costs, and recipient households changed?

Core argument: The share of the U.S. population receiving SNAP doubled from 6% in FY2000 to 12% in FY2025, while real SNAP costs per capita rose 179%, from roughly $100 to $279 per year in 2024 dollars.

Comparing FY2000 with FY2025, the share of the population receiving SNAP doubled from 6% to 12%, while real SNAP costs per capita increased by 179%—from roughly $100 per year to $279 (in 2024 dollars). Despite this growth, per capita participation and costs in FY2025 remained below their pre-pandemic peak in 2013, which coincided with the aftermath of the Great Recession and changes in eligibility and other policies stemming from the 2008 Farm Bill. SNAP is countercyclical, meaning that all else equal, the number of people receiving SNAP should rise during recessions because of increased unemployment and decline as the economy recovers, [though] overall SNAP participation has grown faster than changes in the unemployment rate alone would predict. Over the long run, and especially since FY2020 (due to the Thrifty Food Plan’s increase in the maximum SNAP benefit), costs per capita have not returned to prerecession levels after a period of high unemployment. In FY2023, the share of SNAP households containing an elderly person (36%) exceeded the share containing a child (34%) for the first time. This was a sharp departure from the early 2000s, when more than half of SNAP households contained a child and less than 20% included an elderly person (Figure 2).

Takeaways by Macro Roundup® AI

  1. The share of the U.S. population receiving SNAP doubled from 6% in FY2000 to 12% in FY2025, while real SNAP costs per capita rose 179%, from roughly $100 to $279 per year in 2024 dollars.
  2. In FY2023, the share of SNAP households containing an elderly person reached 36%, exceeding the 34% containing a child for the first time, against the early 2000s when over half contained a child and under 20% included an elderly person.

Related Articles:

  • The Great “Transfer”-mation — Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.
  • Poverty and Dependency in the United States, 1939–2023 — Extending a consistent poverty measure back to 1939, the authors estimate US absolute poverty fell from 48.5% to 19.5% between 1939 and 1963, driven by growth in market income rather than government transfers net of taxes. Poverty fell no faster in the 24 years after the War on Poverty than before.
  • Government Benefit Programs Already Do A Lot To Help Low Income Families — For a two-adult, three-child family, existing taxes and government benefits bring take-home resources to about $58,000 with no earnings, $79,000 with $20,000 of earnings, and $90,000 with $80,000 of earnings plus $15,000 in employer health premiums. A $75,000 gap in earnings and work-related benefits narrows to $11,000 in take-home pay.

AI Summary. The U.S. government has invested $20.9bn across sixteen deals taking direct ownership stakes, expanding beyond its traditional toolkit of grants, loans, and tax incentives. The Department of Defense leads with seven deals, the Department of Commerce has six including a 10% stake in Intel, and partners have mobilized an additional $4.75bn.

Jonathan Hillman Council On Foreign Relations
Date Posted:
Is Database:
Database

Since January 2025, the USG has taken equity stakes totaling $20.9B in 16 American businesses. $8.6B, ~41% of the total, was invested in critical mineral miners and processors, while $8.9B, ~43% of the total, funded the government’s 10% stake in Intel.

Is the U.S. government taking direct equity stakes in companies?

Core argument: Since January 2025, the U.S. government has invested $20.9 billion across sixteen deals involving direct ownership, broadening a toolkit traditionally focused on grants, loans, and tax incentives.

Since January 2025, the U.S. government has invested $20.9 billion across sixteen deals involving direct ownership, broadening a toolkit that has traditionally focused on grants, loans, and tax incentives. The Department of Commerce has participated in six such deals, including taking a 10% stake in Intel. The Development Finance Corporation, the United States’ development bank, has executed three equity transactions in critical minerals, healthcare, and infrastructure. The Department of Defense leads the way with seven such deals. The U.S. government is also working with a range of partners and has mobilized an additional $4.75 billion in investment. Private co-investors include J.P. Morgan, Goldman Sachs, and others.

Takeaways by Macro Roundup® AI

  1. Since January 2025, the U.S. government has invested $20.9 billion across sixteen deals involving direct ownership, broadening a toolkit traditionally focused on grants, loans, and tax incentives.
  2. The Department of Defense leads with seven direct-ownership deals, followed by the Department of Commerce with six, including a 10% stake in Intel, while the Development Finance Corporation has executed three equity transactions in critical minerals, healthcare, and infrastructure.
  3. The U.S. government has mobilized an additional $4.75 billion in investment alongside private co-investors including J.P. Morgan and Goldman Sachs.

Related Articles:

  • Industrial Policy and Economic Security — Industrial policy justified on national security grounds requires weighing how much economic inefficiency is worth tolerating, since costs incurred today make a country poorer and therefore less able to project power later. The calculation is difficult because security gains are probabilistic and long-term economic costs are speculative.
  • The Cold War and the U.S. Labor Market — The authors estimate that declining U.S. military procurement spending from the 1950s to the 1990s explains roughly 18–30% of the decline in manufacturing employment and just under 10% of the rise in top-decile income inequality. They argue Cold War procurement raised demand for manufacturing workers and helped sustain tight labor markets for low-skill workers.
  • Capital Is Making a Comeback — Tangible investment in property, factories and equipment fell from 12.5% to 8.5% of private gross domestic product, while intangible investment in intellectual property, software and process knowledge rose from about 11.5% to 16.75%. The author argues demand for tangible capital investment will now have to rise.

AI Summary. An analysis classifying $4.4tn of $7tn in federal spending by age finds retirees aged 65 and older receive $2.7tn, 38.6% of total outlays and 61.9% of age-assignable spending, versus $1.2tn for working-age adults and $449bn for those under 26. Social Security and Medicare account for 80% of age-assignable spending on older adults.

Kent Smetters University of Pennsylvania
Date Posted:
Is Database:
Database
Is Important:
Important

In 2025, of the 62.5% of Federal spending that is age-assignable on a per-capita basis, US retirees aged 65+ were given $43,700, working-age adults 26–64 got $7,300, and children and young adults got $4,300.

How is federal spending distributed across age groups?

Core argument: Retirees aged 65 and older receive $2.7 trillion of federal spending in fiscal 2025, equal to 38.6% of total outlays and 61.9% of age-assignable spending, versus $1.2 trillion for working-age adults aged 26–64.

We trace spending items within 52 general spending categories, totalling $7T for the 2025 Fiscal Year. We are able to classify a total of $4.4T across three broad age categories and assign the remaining $2.6T to an all-ages residual. Retirees (adults age 65 and older) receive $2.7T, equal to 38.6% of total federal outlays and 61.9% of age-assignable spending. Working-age adults (ages 26-64) receive $1.2T (27.9% of age-assignable), and children and young adults (under age 26) receive $449B (10.3%). The dominance of the retiree category reflects two programs above all others: Social Security and Medicare. Social Security directs $1.3T to retirees, and Medicare sends $835B. Together, they account for 80% of all age-assignable spending on older adults. But the retiree total extends beyond these two entitlements. Federal employee retirement benefits ($169B), housing assistance for older households, Medicaid long-term-care spending, and VA medical care all contribute, making the federal budget more retiree-focused than a Social Security–only lens would suggest.

Takeaways by Macro Roundup® AI

  1. Retirees aged 65 and older receive $2.7 trillion of federal spending in fiscal 2025, equal to 38.6% of total outlays and 61.9% of age-assignable spending, versus $1.2 trillion for working-age adults aged 26–64.
  2. Children and young adults under age 26 receive $449 billion, or 10.3% of age-assignable federal spending, out of $4.4 trillion classified by age within a $7 trillion budget, with $2.6 trillion assigned to an all-ages residual.
  3. Social Security directs $1.3 trillion and Medicare $835 billion to retirees, together 80% of age-assignable spending on older adults, with federal employee retirement benefits ($169 billion), housing assistance, Medicaid long-term care, and VA medical care contributing further.

Related Articles:

  • The Great “Transfer”-mation — Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.
  • France and Britain Are In Thrall To Pensioners — French pensioners receive larger government payments than in any other western country and begin receiving them several years earlier, leaving over-65s with higher average incomes than the working-age population — a situation without precedent internationally or in France's own history. Proposals to raise the retirement age or delay pension increases have triggered nationwide protests and government collapses.
  • The Budgetary Impact of the Abandonment of Federalism — Federal spending on activities originally regarded as state, local, or private-sector responsibilities is estimated to have risen from 2% of GDP in 1950 to 14% in 2019, exceeding the entire growth in federal spending over that period and reaching two-thirds of all federal outlays. Aid to individuals accounts for 80% of that increase, grants to states the remaining 20%.

AI Summary. The authors estimate that a slowdown in US health care spending reflects technology-associated changes in health and site of care (21% of the slowdown, double that in Medicare), more elastic long-run supply (6%), market changes reducing and making demand more elastic (11–27%), improved population health (7%), and slower price growth net of upcoding (24%).

David Cutler and Lev Klarnet Brookings Papers On Economic Activity
Date Posted:
Is Database:
Database
Is Important:
Important

In 2024, medical spending as a share of GDP was just above its 2010 level and 15% ($977B) below its 2010 forecast; 21% of the gap was due to technology, 24% to price reductions, and 11–27% to reforms such as prior authorization and higher deductibles.

What explains the slowdown in US health care spending?

Core argument: Technology-associated changes in health and site of care account for 21% of the overall U.S. health care cost slowdown and double that share in Medicare, according to the authors' estimates.

Five factors are important in the slowdown in spending [Figure 16]. The first is technology-associated changes in health and site of care. These correspond to the subsequent innovations in our model. Together, technologies along these lines account for 21% of the overall cost slowdown and double that in Medicare. Second, long-run supply is more elastic than short-run supply, which lowers spending over time. This is particularly apparent in the impact of patent expiration for pharmaceuticals and in relative declines in imaging reimbursement. We estimate that greater long-run supply explains 6% of the spending slowdown. Third, a variety of market changes contribute to reduced and more elastic demand, including increased cost sharing paid by consumers, physicians not paid as much for using technologies, and insurers imposing restrictions on technology use - a rough guess is that these account for 11 to 27% of the spending slowdown. Fourth, the population is healthier in ways that reduce spending. This includes fewer hospitalizations for smoking-related conditions and reduced need for formal home health care. The birth rate has fallen as well, which reduces the need for care. We estimate improved population health explains 7% of the spending slowdown. A major component is slower price growth. Net of upcoding, we estimate lower price growth explains 24% of the spending slowdown.

Takeaways by Macro Roundup® AI

  1. Technology-associated changes in health and site of care account for 21% of the overall U.S. health care cost slowdown and double that share in Medicare, according to the authors' estimates.
  2. The authors estimate that slower price growth, net of upcoding, explains 24% of the health care spending slowdown, while market changes reducing demand — higher consumer cost sharing, lower physician payment for technology use, and insurer restrictions — account for a rough 11–27%.
  3. Improved population health explains an estimated 7% of the spending slowdown, through fewer smoking-related hospitalizations, reduced need for formal home health care, and a lower birth rate, while greater long-run supply elasticity explains 6%.

Related Articles:

  • Sick as a Dog — US healthcare stocks tracked technology-sector returns from 1989 to 2019 with lower volatility (15% vs 24%), but have since stagnated as technology advanced. Major pharmaceutical firms trade at forward price-to-earnings ratios of 8x–9x, biotech carries one of the market's largest valuation discounts, and 80% of biotech initial public offerings since 2018 have collapsed.
  • Saved by Medicaid: New Evidence on Health Insurance and Mortality from the Universe of Low-Income Adults — Using linked Census and tax records for 37m low-income adults, the authors estimate that state Medicaid expansions raised enrollment by 12 percentage points and cut mortality among low-income adults by 2.5%, implying a 21% reduction in the mortality hazard of new enrollees. They estimate direct budgetary costs of $5.4m per life saved and $179,000 per life-year saved.
  • The Great “Transfer”-mation — Government transfers rose from 8.2% of Americans' total personal income in 1970 to 17.6% in 2022, making them the third largest income source after work and investments. The share of U.S. counties drawing a quarter or more of personal income from transfers rose from under 1% in 1970 to 53% in 2022.

AI Summary. An analysis of about 4.5m households in US public and government-subsidized housing estimates that a majority of tenant stays last longer than the 10-year average spell of welfare receipt. Because rent is capped at 30% of adjusted income, rising income raises rent in tandem, creating an effective 30% marginal tax rate that discourages work.

Howard Husock and Bruce Meyer National Affairs
Date Posted:
Is Database:
Database

HUD data on 4.5mm households show a median stay in public or subsidized housing of 10–15 years, often absent disability or old age. The rent cap equal to 30% of income acts as a 30% earnings tax, disincentivising work.

Does income-based rent in subsidized housing discourage work and lengthen stays?

Core argument: American Enterprise Institute analysis of HUD data covering roughly 4.5 million households estimates that a majority of tenant spells in public and government-subsidized housing extend beyond the 10-year average spell of welfare receipt.

Recent HUD data [provided to] the American Enterprise Institute enabled us to estimate the likely duration of a spell in public and government-subsidized housing for both new entrants and the existing tenant population. Our analysis, covering roughly 4.5 million households, found that a majority of tenant spells in public and government-subsidized housing extend beyond the 10-year average spells of welfare receipts. Tenants' rent payments are limited to 30% of adjusted monthly income. As their income rises, the share of rent tenants must pay increases in tandem, by virtue of an effective 30% marginal tax rate further discouraging work. Housing assistance is not an entitlement - eligibility does not guarantee access, and accessibility is constrained by the supply of housing units. Today, there are under 1 million public-housing units in the United States. The number of HCV vouchers (currently over 2.3 million) is determined annually through the federal-budget process. Due to the limited supply, many households remain on waiting lists for years. Successful households wait an average of 20 months to enter public housing and 26 months to receive a voucher. The lack of time limits thus affects not only tenants, but also those who qualify for assistance but don't receive it.

Takeaways by Macro Roundup® AI

  1. American Enterprise Institute analysis of HUD data covering roughly 4.5 million households estimates that a majority of tenant spells in public and government-subsidized housing extend beyond the 10-year average spell of welfare receipt.
  2. Tenants' rent payments are limited to 30% of adjusted monthly income, so rent rises as income rises, an effective 30% marginal tax rate that further discourages work.
  3. Housing assistance is not an entitlement: the United States has under 1 million public-housing units and over 2.3 million vouchers set annually through the federal budget, and successful households wait an average of 20 months for public housing and 26 months for a voucher.

Related Articles:

AI Summary. Studies of Quebec's shift to universal child care found increases in aggression, anxiety and hyperactivity among children and declines in motor and social skills, with large estimated effects. Researchers attribute the contrast with successful small randomized trials to slipping quality when a pilot is scaled up while holding down costs.

Economist Staff The Economist
Date Posted:
Is Database:
Database
Is Important:
Important

Baker, et al found that a shift to universal child care led to a rise in aggression, anxiety and hyperactivity among Quebecer children. James Heckman, who found very high returns to a small, high quality pilot program, warns against low-cost imitations.

Does scaling up universal child care harm children's development?

Core argument: Two studies by Baker, Gruber, and Mulligan found that Quebec's shift to universal child care appeared to raise aggression, anxiety and hyperactivity among children and lower motor and social skills, with large effects.

Two studies by Baker, Gruber, and Mulligan found that shifting to universal child care appeared to lead to a rise in aggression, anxiety and hyperactivity among Quebecer children, as well as a fall in motor and social skills, [and] the effects were large. How can this be? There is, after all, lots of evidence—in the form of small, randomised controlled trials—in support of similar schemes. [e.g.] In 2010, James Heckman and co-authors calculated that, on conservative assumptions, the investment made in the children [in the famous Perry study] returned 7-10% a year to society—comparable to the historical rate of return on equity. Quebec had tried, while keeping costs down, to imitate a small pilot on a grand scale. Standards inevitably slipped. When Heckman was asked by the NYT about the province’s experience, he noted how different it was from the trials he had studied. “These were warehouses,” he said. “They were fairly impersonal, there wasn’t any real quality. Quality has to be a sine qua non of the whole enterprise.”

Takeaways by Macro Roundup® AI

  1. Two studies by Baker, Gruber, and Mulligan found that Quebec's shift to universal child care appeared to raise aggression, anxiety and hyperactivity among children and lower motor and social skills, with large effects.
  2. James Heckman and co-authors calculated in 2010 that, on conservative assumptions, the investment in children in the Perry study returned 7–10% a year to society, comparable to the historical rate of return on equity.
  3. Heckman told the New York Times that Quebec's child-care settings were "warehouses" that were fairly impersonal and lacked real quality, unlike the trials he had studied, and argued that quality has to be a sine qua non.

Related Articles:

  • The Long-Run Impacts of a Universal Child Care Program — A universal childcare program in Quebec raised childcare use by over 40% of the baseline rate but is associated with lasting declines in noncognitive outcomes such as anxiety and aggression, persisting into the school years. The authors estimate boys saw the largest deterioration, with criminal accusations up 19% and convictions up 22%, while cognitive test score effects were mixed.
  • Universal Childcare, Maternal Labor Supply and Family Well-Being — The authors find Quebec's universal childcare raised the share of children aged 0-4 in care by 14 percentage points relative to the rest of Canada and married women's labor force participation by 7.7 percentage points. Tax revenue from added maternal work fell short of subsidy costs, and child and parental outcomes worsened.
  • Birth Rates Are Falling In The Nordics. Are Family-Friendly Policies No Longer Enough? — Falling Nordic birth rates are now driven by childlessness rather than smaller families, with roughly three-quarters of Finland's recent fertility decline attributable to people who have no children. Nearly 40% of Finnish men with low education are childless at 45, and most have no partners.