Denmark has free child care? Uh, no.

11745935_1665704370329445_941328983120687525_nTL; DR Summary

Denmark has subsidized child care; Denmark does not have free child care. After the subsidy, average child care costs are slightly less than the average price in the U.S.

ACTUAL COSTS OF CHILDCARE IN DENMARK AND THE U.S.

The subsidy/payment scheme is explained in “Early Childhood Education and Care Policy in Denmark“, OECD, pages 52-54): parents generally pay 25%-30% of the costs of day care. Reduced price, yes – free only to those with extremely low family income.

How much does Danish child care cost, after subsidy?

After subsidy, the average cost was 370 Euros in 2013 through age 3; 213 Euros for age 4 and 5. On Jan 1, 2013, the Euro exchange rate was US$1.32. Thus, AFTER subsidy, the average cost of childcare in Denmark was $488/month per child through age 3, and US$284 after age 3.

Even Bernie Sanders, when confronted on this topic, admitted that childcare costs a few hundred dollars per month.

How does that compare to the U.S.?

According to the United States Census, the 2013 average price of child care in the U.S. was $572/month (all ages).

The average, of course, means some pay less and some pay more, sometimes much more. In the State of Oregon, in 2014, 75% of child care services were available for less than $550 to $1219 (Table 9 – and Tables 6-8) depending on facility, location and age of the child. In some parts of New York City, per news reports, child care costs US$2000 to US$2500 per month.

Comparing the Danish average ($488/month/child <= 3, after subsidy) to the US average ($572/month/child, without any subsidy) we see that Denmark has expensive child care (nearly US$2000/month before subsidies). After the Danish taxpayer covers 75% of the cost, Danes still pay high prices for child care. 

In both Denmark and the U.S., there may be discounts for additional children beyond the first, from each family.

BOTTOM LINE

  • Child care is not free in Denmark.
  • Child care in Denmark is subsidized.
  • After subsidy, Danish child care costs are not far off from U.S. costs.
  • The claim of free child care is a straight up lie.

DECLINING POPULATION

  • Denmark has one of the lowest birth rates in the world.
  • Denmark’s fertility rate is below the replacement rate.
  • Denmark has an economic and basic survival reason to encourage couples to have more children. One way to do that is by providing free child care and other child support services.

Here is a direct quote form the Telegraph that summarizes the key points:

Demographers fear the declining population could undermine the welfare system.

Denmark’s birth rate is 185th in the world and in 2011, 4,400 fewer Danish children were born than in 2010. For the first three months of 2012, the number declined even further with this year due to be the lowest birth rate in the country since 1988.

Hans Oluf Hansen, former professor of Economics at the University of Copenhagen, said: “Our fertility rate is well under the replacement rate. In the long run, there will be fewer young people to provide for the elderly.”

According to experts, the continued decline in birth rates in Denmark is because fewer families are having a third and fourth child, which would help compensate for those with one or no children.

For the population to remain at a constant level, experts say that the fertility rate must be slightly above two children per woman, but last year, the fertility rate was 1.76 per woman.

The decline in young people affects the labor supply. Research has shown that when women who have babies have access to child care and long leave policies, they are somewhat more likely to return to work afterwards, helping to keep the labor supply large:

Studies on female labour supply show that contrary to most other countries where young children have a large negative impact on mothers’ labour supply this effect is much smaller or non-existing in the Nordic countries (see Smith et al., 2003).”

Countries like Denmark and Sweden have generous time off for parents. In Sweden, either parent may take off up to 480 days paid leave during the first 8 years of a child’s life. How this is paid for will be described in another post but suffice for now to note that in these countries, 50% or more of income is collected in taxes and turned over to the State.

  • 1 in 4 residents of Denmark live in Copenhagen
  • Copenhagen is the fifth most expensive city in which to live. Practically requires two incomes which is in conflict with having kids. Hence, Denmark provides many child oriented benefits to encourage having kids.

FUTURE POSTS

Future posts will look at:

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Why is the Denmark ranked the happiest country in the world by the United Nations?
$20 minimum wage
33 hour work week
Free University
Free Child Care
Free Health Care

Why is Denmark the happiest country in the world?
$20 minimum wage

33-hour work week

Free university

Free childcare

Free healthcare

Share if America should follow their lead

Occupy Democrats

Denmark v. USA
$21/hr. minimum wage   $7.25/hr. minimum wage
Free healthcare, childcare, college and job training – Healthcare, childcare and college are a luxury, can bankrupt you or saddle you with debt
Paid sick and parental leave – No paid sick/parental leave
Only 6.1% of children live in poverty – 23.1% of children are poor, highest rate in rich world
Ranked #1 happiest country
Ranked #1 country for business
Ranked #1 most unequal rich country
Share if Americans can learn from Denmark!
Occupy Democrats

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