Abstract
For many working parents, the excitement that comes with expecting a baby is soon replaced by the stress of identifying affordable and high-quality childcare. In countries where early childcare is available, the marketplace of nonprofit or corporate childcare centers is often the only viable option. In competitive markets, families place their names on multiple waiting lists and hope that a spot opens before their parental leave runs out (if they are lucky enough to have it). Personally, I had my son on five waiting lists prior to his birth in Chicago, a city far from the most expensive in the United States. Rather than an agentic consumer on the open market, I felt more like a small ship being tossed about on the rough ocean, trying my hardest to stay afloat amid very expensive and inaccessible childcare, a constrained set of options originating from forces beyond my comprehension.
It is this rough sea of childcare markets that Aisling Gallagher’s recent Childcare Provision in Neoliberal Times: The Marketization of Care seeks to investigate. How did we come to rely on childcare markets, and what are the factors that have shaped their present form? Focusing on the country of Aotearoa New Zealand, Gallagher analyzes nearly fifty years of childcare policy and stakeholder behavior (including not only parents and childcare providers, but also financiers and software developers) to argue that, like other market forms, childcare markets are not purely an organic economic system where parent-consumer choice regulates childcare quality and cost. Integrating theoretical insight from Social Studies of Marketization and Actor-Network Theory, Gallagher shows how childcare provision in New Zealand is structured by state-led marketization whereby public investments in early childcare both relied on and further developed market-based childcare solutions and the growth of for-profit corporate childcare centers. As a consequence, childcare remains extremely expensive despite massive public spending. On average, parents in New Zealand spend 30 percent of their income on childcare, second only to the United States (32 percent) among OECD countries (Shine 2023). These high costs exist despite New Zealand’s government spending nearly twice as much on early childcare as that of the United States, measured as a percentage of GDP (OECD 2023).
Gallagher’s major contribution is the detailed telling of state-led marketization in New Zealand and its consequences across a growing set of market actors. The book opens with an overview of the theoretical perspective it uses to analyze childcare markets and marketization. Gallagher frames childcare as a market of collective concern—a space where aims of the common good collide with zero-sum market-based economies and ideologies. Here, the public sector plays an active role to correct and repair the harms caused by the market, such as educational inequalities, economic burdens on families, and low-quality care. The state’s actions, however, are limited by the established reliance on the market for childcare provision, reluctance by leaders to invest in alternative non-market solutions, and lobbying by interest groups. In this bounded environment, public investments in childcare become market-forming rather than market-challenging. Hence, one of Gallagher’s major contributions is that contemporary childcare markets are not simply the result of state non-intervention but are instead actively constructed by state policies and investments, a process she calls state-led marketization.
Providing evidence for this claim, Gallagher reviews two periods of state-led marketization where public investments fundamentally altered childcare markets in ways that ultimately extended their influence and integration into other markets. The first period is the Before Five reforms, launched in 1988, that provided bulk funding to childcare centers in the form of grants and subsidies. Eligibility for funding required childcare providers to adhere to standards that included child-staff ratios and certain staff/teacher training levels. Gallagher argues that these standards operated as a form of market pacification: the creation of criteria and common language used to assess market products. Market pacification, while state-led, was also influenced by for-profit childcare centers who successfully opposed the requirement for parent-led governing boards, a common practice in nonprofit centers. The resulting standards of care advantaged scale, where staffing rotations and training requirements could be routinized. This led to continued growth and influence of for-profit childcare centers.
Investments from the Before Five reforms were short-lived due to the subsequent election of fiscally conservative leadership, but the growth of for-profit centers would shape markets for years to come, particularly in the early- to mid-2000s when the second phase of childcare investments, New Zealand’s Strategic Plan, took effect. Under this initiative, the state promised to pay for 20 hours of childcare at a set rate. Payments were made directly to childcare centers, but they were often delivered after care had been provided and were sometimes unexpectedly reduced if standard violations were observed. These practices once again advantaged for-profit childcare centers with the scale to address such uncertainties. Paradoxically, a loophole in the Strategic Plan allowed centers to charge additional fees to parents in excess of the guaranteed publicly sponsored 20 hours, dramatically limiting the extent that the plan reduced the cost of early childcare.
It is not just that New Zealand’s public investments in childcare failed to dramatically alter their neoliberal market-based foundations—arguably never a goal in the first place—or that they also failed to substantially lower the cost of early childcare, raise standards, or increase accessibility; they also accelerated the consolidation of childcare among a powerful set of corporations and led to its financialization. The publicly funded 20-hour childcare payments drove the perception that childcare centers were safe and lucrative investments for financiers, real estate investors, and low-level “moms and pops” investing their savings. Anticipated growth in enrollment following the Strategic Plan drove investments in properties that would be rented as childcare centers, while the expansion of large for-profit childcare centers led to their corporate status and public offerings on the stock exchange. Other childcare centers were purchased by investment firms observing opportunities to take advantage of an influx in public spending. The rising scale of childcare and its standardization even created a sub-market for administrative software specially designed for early childcare center reporting. In just a few decades of public spending, New Zealand’s childcare market attracted a host of new actors, the majority of which viewed the field less as a place of care and more as a financial instrument.
Gallagher’s central thesis, that childcare markets are actively constructed through state influence, is compelling and well-evidenced. Her data consist of parliamentary documents, childcare company financial reports, and news media as well as 44 interviews with a diverse set of childcare market actors, including public sector leaders, center owner-operators, and childcare property brokers. She relies much more heavily on archival data than the interviews, an effective choice because the archives are better suited for her analysis of long-term market formation. The chapters are well organized by providing theoretical foundations first, then illustrating state-led marketization in New Zealand before introducing various new types of market actors that arrive as childcare becomes financialized.
The theoretical lens of Social Studies of Marketization provides a unique and valuable perspective to research on childcare, which has focused largely on the harms of expensive market-based childcare centers rather than their development. At times, however, it seemed like almost everything was interpreted as a sign of marketization. For example, the use of administrative software and the establishment of regulatory standards were viewed as a form of market pacification. But these practices could just as easily be imposed in a non-market setting, such as public primary or secondary school. There are, of course, different path dependencies in these counterfactuals, but perhaps those preexisting conditions, or other factors, are more fundamental elements than the forms of pacification focused on in the text.
Childcare Provision in Neoliberal Times is an important book because it does not take current norms of neoliberal childcare markets for granted but investigates their formation. As a result, it shows how states play a fundamental role in shaping childcare markets. It also provides crucial insight for the future. So long as capitalist logics guide early childcare policy, we creep away from the foundations of care in this domain and toward greater emphasis on capital accumulation through consolidation and financialization.