Overview
David Blau is a labor economist at the University of North Carolina at Chapel Hill. He is a leading researcher on the economics of child care markets, focusing on the supply, demand, and quality of child care and their interactions with maternal labor supply. His work identified the key policy trade-off between subsidies designed to promote maternal employment (unconditional α-subsidies) and those designed to improve child care quality (quality-contingent β-subsidies), and documented the surprising finding that raising child care quality is inexpensive yet the market systematically produces mediocre quality.
Key Contributions / Features
- α vs. β subsidy trade-off — showed formally that employment-maximizing subsidies conflict with quality-maximizing subsidies; optimal subsidy design depends on which goal takes priority.
- Child care quality puzzle — documented that raising quality from "minimal" to "good" raises costs only 11%, the market rewards quality with higher prices, yet average quality is mediocre; attributed to information failures and provider incentives.
- Child care labor supply (Blau 2001, CPS 1977–1998) — elasticity of supply ≈ 1.15; a 24% demand increase 1983–1998 should have raised wages 17% but actual increase was only 8%.
- Quality production (Blau 1997, 1999, 2000; Blau and Mocan 2002) — within-center, only teacher training robustly predicts process quality; staff-child ratios and group size predict structural but not process quality.
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