Matching Markets in Child Care
Source: https://pursuit.unimelb.edu.au/articles/the-algorithm-for-accessing-child-care
Child care has recently become a growing concern for many parents in Australia, with the process to obtain it involving applications to competitive centers with no guarantee of an offer or a good fit. In many ways, it seems unfair and closer to the process of applying for colleges or jobs rather than trying to gain access to a basic need. This article explains how the Centre for Market Design (CMD) at the University of Melbourne has been working on devising matching markets to solve this problem. CMD is working alongside the Victorian and Commonwealth governments on several matching markets, and the one they are designing for child care is largely based on the already-successful market they created to match graduates to government positions. Another example of a successful matching market implemented at scale is the United Kingdom and United States’ method of assigning children to schools; each child (family) ranks schools by preference, and schools simultaneously rank students by priority based on criteria like how far a student lives or whether a sibling already attends.
In theory, a matching market seems to perfect solve the problem of child care assignments in Australia, and while it has successfully solved similar problems in other parts of the world, there are a few roadblocks. Because many children only attend child care part-time, this complicates the model quite a bit because supply and demand do not always line up neatly. CMD is currently conducting research on how to adapt the algorithms that exist to account for this difference, and once that problem is solved, matching markets could potentially revolutionize not only child care, but other larger issues like refugee resettlement, for instance.
This article provides real-world evidence of the application of matching markets to solve important, yet seemingly common issues like employment, schooling, and child care. In class we discussed how to find market clearing prices and assignments, and I think this article has an interesting take that focuses less on pricing and more on the assignment problem that matching markets solves. While in reality, pricing likely factors into the algorithm employed by the governments and entities that use this concept in school districts, for example, I think stepping back and looking at the broader idea of rethinking a typical marketplace is essential in alleviating the strain that a decentralized market with competitive choices places on populations. The simple act of weighing the needs of both parties involved in a marketplace equally (both supply and demand sides) creates efficient results that solves problems elegantly and can be applied to a variety of situations.