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Is Universal Child Care Leveling the Playing Field?

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  • Tarjei Havnes
  • Magne Mogstad

Abstract

Many developed countries currently consider a move towards a universal child care program. The challenge in assessing the case for universal child care programs is that the evidence base is scarce. We analyze the staged expansion of subsidized, universally accessible child care in Norway. Our approach differs from existing literature which estimate mean impacts of universal child care programs; in contrast, we use non-linear difference-in-differences methods to estimate quantile treatment effects, showing how the child care expansion affected the earnings distribution of exposed children as adults. We complement these estimates with local linear regressions of the child care effects by family income. Our findings suggest that the effects of child care vary systematically across the earnings distribution, that the mean impact misses a lot, and that children of low income parents seem to be the primary beneficiaries of subsidized child care. These findings are important when considering the case for universal child care programs, since the benefits of providing subsidized child care to middle and upper-class children are unlikely to exceed the costs. To help understand the differential effects on earnings, we examine how the child care expansion affected the educational trajectories and cognitive test scores of the exposed children.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4014.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_4014

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Keywords: universal child care; child development; non-linear difference-in-differences; heterogeneity; quantile treatment effects;

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References

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  1. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," Journal of Labor Economics, University of Chicago Press, University of Chicago Press, vol. 24(3), pages 411-482, July.
  2. Elizabeth U. Cascio, 2009. "Maternal Labor Supply and the Introduction of Kindergartens into American Public Schools," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
  3. Black, Sandra E. & Devereux, Paul J. & Løken, Katrine V. & Salvanes, Kjell G., 2012. "Care Or Cash? The Effect Of Child Care Subsidies On Student Performance," Working Papers in Economics, University of Bergen, Department of Economics 09/12, University of Bergen, Department of Economics.
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  6. Pierre Lefebvre & Philip Merrigan & Matthieu Verstraete, 2008. "Childcare Policy and Cognitive Outcomes of Children: Results from a Large Scale Quasi-Experiment on Universal Childcare in Canada," Cahiers de recherche, CIRPEE 0823, CIRPEE.
  7. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2003. "What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments," Working Papers, RAND Corporation Publications Department 109, RAND Corporation Publications Department.
  8. Nabanita Datta Gupta & Marianne Simonsen, 2007. "Non-cognitive Child Outcomes and Universal High Quality Child Care," Economics Working Papers, School of Economics and Management, University of Aarhus 2007-17, School of Economics and Management, University of Aarhus.
  9. Heckman, James J & Smith, Jeffrey, 1997. "Making the Most Out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts," Review of Economic Studies, Wiley Blackwell, Wiley Blackwell, vol. 64(4), pages 487-535, October.
  10. Esther Duflo, 2000. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," NBER Working Papers 7860, National Bureau of Economic Research, Inc.
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  12. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
  13. Baker, Michael, 2011. "Universal Early Childhood Interventions: What is the Evidence Base?," CLSSRN working papers, Vancouver School of Economics clsrn_admin-2011-29, Vancouver School of Economics, revised 28 Nov 2011.
  14. Susan Athey & Guido W. Imbens, 2002. "Identification and Inference in Nonlinear Difference-In-Differences Models," NBER Technical Working Papers 0280, National Bureau of Economic Research, Inc.
  15. Herbst, Chris M. & Tekin, Erdal, 2010. "Child care subsidies and child development," Economics of Education Review, Elsevier, Elsevier, vol. 29(4), pages 618-638, August.
  16. Sergio Firpo, 2004. "Efficient Semiparametric Estimation of Quantile Treatment Effects," Econometric Society 2004 North American Summer Meetings, Econometric Society 605, Econometric Society.
  17. Michael Baker & Jonathan Gruber & Kevin Milligan, 2006. "Universal Childcare, Maternal Labor Supply, and Family Well-Being," Working Papers id:547, eSocialSciences.
  18. Heckman, James J. & Masterov, Dimitriy V., 2007. "The Productivity Argument for Investing in Young Children," IZA Discussion Papers 2725, Institute for the Study of Labor (IZA).
  19. Almond, Douglas & Currie, Janet, 2011. "Human Capital Development before Age Five," Handbook of Labor Economics, Elsevier, Elsevier.
  20. Michael Baker, 2011. "Innis Lecture: Universal early childhood interventions: what is the evidence base?," Canadian Journal of Economics, Canadian Economics Association, Canadian Economics Association, vol. 44(4), pages 1069-1105, November.
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  22. Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2008. "How far can reduced childcare prices push female labour supply?," Labour Economics, Elsevier, Elsevier, vol. 15(4), pages 647-659, August.
  23. Tarjei Havnes & Magne Mogstad, 2011. "No Child Left Behind: Subsidized Child Care and Children's Long-Run Outcomes," American Economic Journal: Economic Policy, American Economic Association, American Economic Association, vol. 3(2), pages 97-129, May.
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Cited by:
  1. Drange, Nina & Havnes, Tarjei & Sandsør, Astrid M. J., 2012. "Kindergarten for All: Long Run Effects of a Universal Intervention," IZA Discussion Papers 6986, Institute for the Study of Labor (IZA).
  2. Kottelenberg, Michael J. & Lehrer, Steven F., 2014. "Do the Perils of Universal Child Care Depend on the Child's Age?," CLSSRN working papers, Vancouver School of Economics clsrn_admin-2014-14, Vancouver School of Economics, revised 26 Mar 2014.
  3. Battistin, Erich & Meroni, Elena Claudia, 2013. "Should We Increase Instruction Time in Low Achieving Schools? Evidence from Southern Italy," IZA Discussion Papers 7437, Institute for the Study of Labor (IZA).
  4. Ylenia Brilli, 2012. "Public and parental investments in children. Evidence from the literature on non-parental child care," CHILD Working Papers Series, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA 6, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.

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