No. of Recommendations: 5
Daycare could be huge. I recall seeing stories over the years of people opting out of work because daycare would have eaten the person's salary, so it wasn't worth it to go to work at all. I'm not sure "free" daycare would be an answer.
Daycare is expensive because daycare is expensive. It's labor intensive and there's almost nothing that can be done to increase the productivity (in economic terms) of the facility. Little kids need a certain number of humans in the room with them, and the humans have to have a certain set of skills (and background checks and whatnot). Kids need space, and outdoor recreation opportunities, and food/snacks/toys and a place to nap, and other things that can't really be value-engineered out of the facilities. There's almost no possible way to reduce the costs of daycare. So the business suffers heavily from Baumol's cost disease.
There may be no solution. There are other industries that similarly suffer from the Baumol effect (older child education, medical services), but at least in those fields you can imagine how technology can be applied to make them more efficient (in the pure economic sense of output per worker), even in the near term. But for daycare? Hard to solve for that....
