A benefit‐cost analysis of child care subsidy expansions: The New York State case

Abstract Proposals to expand child care assistance have proliferated at the national and state levels. This paper uses a novel approach to estimate the benefits and costs of providing child care subsidies to families up to three times the federal poverty line while supplementing child care worker compensation — a recently‐enacted reform in New York State. We estimate a net present value of $12.14 billion in yearly social benefits relative to a yearly fiscal cost of $1.61 billion. We also examine the time path of benefits and costs, impacts of alternative program designs, and the sensitivity of our main findings.