ABSTRACT
There has been a long-term shift toward a greater payoff to investment in human capital, which has led to a greater level of female labor force participation and migration to skill-intensive occupations, but at the same time has created a need for higher levels and new forms of out-of-family childcare. The western industrial economies have come up with a diverse array of policies and programs to help sponsor this out-of-family childcare. Some are predicated on the need to provide a type of social insurance for the parents and siblings of children with learning disabilities. Others can be thought of as relaxing the borrowing constraint implied by the fact that future income from the labor market usually cannot be used as collateral for loans. There are questions, however, about the effectiveness of these programs and the control of their costs. This is not surprising given the rising share of GDP devoted to these activities in the advanced industrial economies.
