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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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Bibliographic Info

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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Related research

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. Michael Baker & Jonathan Gruber & Kevin Milligan, 2006. "Universal Childcare, Maternal Labor Supply, and Family Well-Being," Working Papers id:547, eSocialSciences.
  2. Datta Gupta, Nabanita & Simonsen, Marianne, 2010. "Non-cognitive child outcomes and universal high quality child care," Journal of Public Economics, Elsevier, vol. 94(1-2), pages 30-43, February.
  3. Chris M. Herbst & Erdal Tekin, 2008. "Child Care Subsidies and Child Development," NBER Working Papers 14474, National Bureau of Economic Research, Inc.
  4. Black, Sandra E. & Devereux, Paul J. & Loken, Katrine Vellesen & Salvanes, Kjell G., 2012. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," IZA Discussion Papers 6541, Institute for the Study of Labor (IZA).
  5. Sergio Firpo & Nicole M. Fortin & Thomas Lemieux, 2007. "Unconditional Quantile Regressions," NBER Technical Working Papers 0339, National Bureau of Economic Research, Inc.
  6. 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.
  7. Aaberge, Rolf, 1997. "Interpretation of changes in rank-dependent measures of inequality," Economics Letters, Elsevier, vol. 55(2), pages 215-219, August.
  8. 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 0823, CIRPEE.
  9. 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, vol. 3(2), pages 97-129, May.
  10. Michael Baker, 2011. "Innis Lecture: Universal early childhood interventions: what is the evidence base?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(4), pages 1069-1105, November.
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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).

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