Writing at NRO earlier this week, Abby McCloskey (a former American Enterprise Institute colleague of mine) argued that Congress should fund paid family leave, further subsidize child care, and expand the earned income tax credit. These policies, in her view, would be better than simply providing tax relief to parents through an expanded tax credit for children. I have made the contrary case elsewhere and won’t repeat it here.
I’ll just make two points. The first is that while there is something to her political analysis, she has inadvertently stacked it in her favor. The possibility she is neglecting is that Congress will pass a paid-leave benefit and then every year Democrats will seek to make it more generous.
The second is that the main question is what the point of the policy is supposed to be. McCloskey is right that a tax credit for children might not do anything to get mothers of young children to increase their participation in the paid labor force and thus increase GDP. It might even lead some of them to reduce that participation. The choice would be their families’. McCloskey prefers policies that favor two-earner families. I agree that those policies would encourage paid work by mothers. I just don’t believe that should be the goal of government action.