Paid to Stay Home

Angela Merkel has gained world notoriety for her handling of the European euro crisis, but at home in Germany the chancellor is feeling the heat on about a "child-care benefit."  Merkel has proposed a monthly payment of 150 euros to parents who do not put their children into creches.  She defends this as "an essential part of our policy of freedom of choice." 

Critics point out, as noted in the Economist (May 5, 2012), that this seems to be an odd remedy given Germany's shrinking and aging population and the existing preference for women to stay at home.  "German women work fewer hours than women in most other OECD countries...  In 2008 just 18% of children under the age of three were in formal child care, against the OECD average of 30%."

Critics point out that investing more in creches might be a better idea.  "Good creches are thought by some to be a cure-all.  By helping women to combine motherhood and career, they relieve skills shortages, boost growth, and reduce inequality between the sexes.  They might even lift Germany's miserably low fertility rate.  Children of immigrant parents are often handicapped by speaking German badly;  creches help to correct that."

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