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Do child care subsidies influence single mothers' decision to invest in human capital?

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  • Herbst, Chris M.
  • Tekin, Erdal

Abstract

A child care subsidy is one of the most effective policy instruments to facilitate low-income individuals' transition from welfare to work. Although previous studies consistently find that subsidy receipt is associated with increased employment among single mothers, there is currently no evidence on the influence of these benefits on the decision to invest in human capital. Using data from the Kindergarten cohort of the Early Childhood Longitudinal Study, this paper examines the impact of child care subsidy receipt on the likelihood of engaging in education and job training activities. We identify the impact of subsidy receipt by exploiting plausibly exogenous geographic variation in the distance that parents must travel from home in order to reach the nearest social service agency that administers the subsidy application process. Results suggest that child care subsidies encourage single mothers to engage in human capital investment. In particular, our instrumental variables estimates imply that subsidy receipt increases the likelihood that a single mother enrolls in courses at a school or university by 13 percentage points and participates in a job training program by 8 percentage points.

Suggested Citation

  • Herbst, Chris M. & Tekin, Erdal, 2011. "Do child care subsidies influence single mothers' decision to invest in human capital?," Economics of Education Review, Elsevier, vol. 30(5), pages 901-912, October.
    • Handle: RePEc:eee:ecoedu:v:30:y:2011:i:5:p:901-912
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    References listed on IDEAS

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    1. Herbst, Chris M. & Tekin, Erdal, 2010. "Child care subsidies and child development," Economics of Education Review, Elsevier, vol. 29(4), pages 618-638, August.
    2. Jonah B. Gelbach, 2002. "Public Schooling for Young Children and Maternal Labor Supply," American Economic Review, American Economic Association, vol. 92(1), pages 307-322, March.
    3. Erdal Tekin, 2007. "Childcare Subsidies, Wages, and Employment of Single Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 42(2).
    4. Herbst, Chris M., 2008. "Who are the eligible non-recipients of child care subsidies?," Children and Youth Services Review, Elsevier, vol. 30(9), pages 1037-1054, September.
    5. Herbst, Chris M. & Tekin, Erdal, 2010. "The Impact of Child Care Subsidies on Child Well-Being: Evidence from Geographic Variation in the Distance to Social Service Agencies," IZA Discussion Papers 5102, Institute of Labor Economics (IZA).
    6. Berger, Mark C & Black, Dan A, 1992. "Child Care Subsidies, Quality of Care, and the Labor Supply of Low-Income, Single Mothers," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 635-642, November.
    7. Jean Kimmel, 1998. "Child Care Costs As A Barrier To Employment For Single And Married Mothers," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 287-299, May.
    8. David M. Blau & Alison P. Hagy, 1998. "The Demand for Quality in Child Care," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 104-146, February.
    9. Tekin, Erdal, 2005. "Child care subsidy receipt, employment, and child care choices of single mothers," Economics Letters, Elsevier, vol. 89(1), pages 1-6, October.
    10. David Blau & Erdal Tekin, 2007. "The determinants and consequences of child care subsidies for single mothers in the USA," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 719-741, October.
    11. Erdal Tekin, 2007. "Single Mothers Working At Night: Standard Work And Child Care Subsidies," Economic Inquiry, Western Economic Association International, vol. 45(2), pages 233-250, April.
    12. Chris Herbst, 2010. "The labor supply effects of child care costs and wages in the presence of subsidies and the earned income tax credit," Review of Economics of the Household, Springer, vol. 8(2), pages 199-230, June.
    13. LaDonna Pavetti & Gregory Acs, 2001. "Moving Up, Moving Out, or Going Nowhere? A Study of the Employment Patterns of Young Women and the Implications for Welfare Mothers," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 20(4), pages 721-736.
    14. Paul M. Ong, 2002. "Car ownership and welfare-to-work," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 21(2), pages 239-252.
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    Citations

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    Cited by:

    1. Chris Herbst & Erdal Tekin, 2012. "Child Care Subsidies, Maternal Well-Being, and Child-Parent Interactions: Evidence from Three Nationally Representative Datasets," Working Papers 1372, Princeton University, School of Public and International Affairs, Center for Research on Child Wellbeing..
    2. Brown, Jessica H. & Herbst, Chris M., 2023. "Minimum Wage, Worker Quality, and Consumer Well-Being: Evidence from the Child Care Market," IZA Discussion Papers 16257, Institute of Labor Economics (IZA).
    3. Chris M. Herbst, 2023. "Child Care In The United States: Markets, Policy, And Evidence," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 42(1), pages 255-304, January.
    4. Guarini, Giulio & Laureti, Tiziana & Garofalo, Giuseppe, 2020. "Socio-institutional determinants of educational resource efficiency according to the capability approach: An endogenous stochastic frontier analysis," Socio-Economic Planning Sciences, Elsevier, vol. 71(C).
    5. Elizabeth E. Davis & Caroline Carlin & Caroline Krafft & Nicole D. Forry, 2018. "Do Child Care Subsidies Increase Employment Among Low-Income Parents?," Journal of Family and Economic Issues, Springer, vol. 39(4), pages 662-682, December.
    6. Jade Marcus Jenkins & Greg J. Duncan, 2023. "Skill Building in Early Care and Education Programs," The ANNALS of the American Academy of Political and Social Science, , vol. 706(1), pages 65-88, March.
    7. repec:pri:crcwel:wp11-20-ff is not listed on IDEAS
    8. Herbst, Chris M. & Tekin, Erdal, 2012. "The geographic accessibility of child care subsidies and evidence on the impact of subsidy receipt on childhood obesity," Journal of Urban Economics, Elsevier, vol. 71(1), pages 37-52.
    9. Struffolino, Emanuela & Mortelmans, Dimitri, 2018. "Lone Mothers in Belgium: Labor Force Attachment and Risk Factors," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 257-282.
    10. Owen N. Schochet & Anna D. Johnson, 2019. "The Impact of Child Care Subsidies on Mothers’ Education Outcomes," Journal of Family and Economic Issues, Springer, vol. 40(3), pages 367-389, September.
    11. Herbst, Chris M., 2022. "Child Care in the United States: Markets, Policy, and Evidence," IZA Discussion Papers 15547, Institute of Labor Economics (IZA).
    12. repec:pri:crcwel:wp12-01-ff is not listed on IDEAS
    13. Chris M. Herbst & Erdal Tekin, 2014. "Child Care Subsidies, Maternal Health, And Child–Parent Interactions: Evidence From Three Nationally Representative Datasets," Health Economics, John Wiley & Sons, Ltd., vol. 23(8), pages 894-916, August.
    14. Erdal Tekin, 2014. "Childcare subsidy policy: What it can and cannot accomplish," IZA World of Labor, Institute of Labor Economics (IZA), pages 1-43, July.
    15. Lin Zhang, 2021. "Education Expenditure and Parenting Styles: Evidence from Cognitive Development in China," Journal of Family and Economic Issues, Springer, vol. 42(4), pages 729-744, December.

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