Even worse than that, it doesn’t take into account commutes, and the opportunity cost of not spending time with your own kids. If you make just enough money at work to pay for childcare, what the heck are you doing?
If you make just enough to pay for childcare now and decide to, instead, leave your job to spend time with your children, you are giving up some number of years of professional job growth. When you return to the market, you will likely not have grown your skills and will most likely enter around the same pay level as when you left. If you stay in the market, you will have spent that money on childcare, but you will now most likely have grown your salary through wage increases and job transitions.
In addition, while you may be giving up some time with your children during their early years, they also gain substantial growth with their peers and outside influences which may help them as they grow older.
My wife and I made this choice with our children, and that was what the heck we were doing. Childcare was expensive, but we knew it had a time limit, and when our children finally entered public school, we were substantially better off than if one of us had left our jobs. We feel the experience for our children was great as well, considering they still speak fondly of their pre-K experiences.
It is also hard to stay current and to retain confidence in your ability when you are out of the working world.
Don't get me wrong - stay at home parents have amazing skills and learn loads, but few employers see that as a benefit when you are looking to return to work. In the UK there is a movement called 'Pregnant then Screwed' which is trying to address this.
This is true, but does raise a couple of obvious points.
First, if there are implied future earnings returns from working with young child, those ought to be factored into the calculations for returns to work in the OP (with appropriate caveats about possible cashflow problems).
Secondly, should it be affecting future employability? The few career paths where absolute commitment to work and track record of continuous improvement and networking seem absolutely necessary signals (like trying to make partner at an accountancy or law firm) tend to pay pretty well anyway. Other career paths should - in theory at least - be less contingent on continuity, or even offer realistic opportunities to continue to work or use work related skills part time and remotely.
I think there is also a covert feeling that those with children (in particular women) will be less wedded to their role. People have been shocked when I've stayed home to look after our sick children, and my wife went into work.
This remains a gendered issue.
$540/40hrs = $13.5/hr. Any number of jobs pay this little.
It smells a little like BS to me, both because it seems to be often repeated (so sounds like a talking point) but I can't imagine any parents I know to actually decide this way
Probably mitigating the cost of family health care between two earners (US centric, of course).