There's nothing quite like making something "free" to make it expensive.  The latest such story: subsidized day care in Berlin.
Elise Hanrahan should be at work today, but instead she’s standing in a Berlin café, trying to jiggle her one-year-old baby Marta to sleep.

US-born Hanrahan had intended to return to her role as a digital humanities researcher, and also begin her PhD, earlier this year when her year of maternity leave was up. But the critical lack of places in Berlin daycare centres (Kindertagesstätte, or Kita for short) has meant that parents like her have ended up off work with their kids instead.

The meetings and events Hanrahan’s office had scheduled for her return have had to be cancelled. And she can’t even tell her boss when she’ll be back.

On top of that, Hanrahan’s family is struggling to make rent. German employers are required to hold mothers’ jobs open for three years once they go on maternity leave, but after the first year maternity pay comes to an abrupt end, whether the family has secured a childcare spot or not.

“It’s really upsetting for our family,” says Hanrahan. “Not just the money that we’re losing, because I’m now on unpaid maternity leave, but also the consequences for my career. It’s significant.”
What the government subsidizes, it gets more of, excess demand for Kita edition.
Spokeswoman for the Senate for Education, Youth and Family Iris Brennberger says the city is currently about 2,500 Kita spots short: “that’s the difference between places that are on offer right now and children who have a Kita-Gutschein,” or document which enables a family to claim free childcare.

However, not all families apply for this voucher in advance, which means the real figure may be much higher. Brennberger says that currently there are 220,000 children aged 0-6 living in Berlin, but just 170,000 Kita places. Of course, many new babies stay at home, and children are not required to be in educational care until the age of three. But since August 2016, Berlin babies have been entitled to at least four years’ free Kita, so it is a popular choice.
Yes, and the market for privately-provided child care is likely subject to the arbitrage conditions, such that there is somewhere a formerly working now mom who is indifferent between engaging a private provider or working full time as a mom.  Or, somehow, Berlin authorities have to come up with incentives to staff those spots.
One thing the union, authorities and parents all seem to agree on is that the crisis is driven by staff shortages. Some Kitas have free spaces for children, but not enough staff available to take care of them.

Parents have reported being asked to collect their children early or even keep them at home when the childcare centres are short-staffed. The instability puts a strain on working parents, but Hanrahan says it’s important to acknowledge the pressure teachers are under as well. “The teachers’ interests are our interests.”

Hanrahan says the group’s hope is that better pay and working conditions will attract more teachers to the profession and enable them to do a better job under less pressure.
That has always been the fundamental tradeoff in the political economy of day care.  It's still high-income parents contracting child rearing out to poorer domestic workers, whether we call them nannies or day-care staff.

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