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Care or Cash? The Effect of Child Care Subsidies on Student Performance

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  • Black, Sandra
  • Devereux, Paul J.
  • Løken, Katrine
  • Salvanes, Kjell G

Abstract

Given the wide use of childcare subsidies across countries, it is surprising how little we know about the effect of these subsidies on children’s longer run outcomes. Using a sharp discontinuity in the price of childcare in Norway, we are able to isolate the effects of childcare subsidies on both parental and student outcomes. We find very small and statistically insignificant effects of childcare subsidies on childcare utilization and parental labor force participation. Despite this, we find significant positive effect of the subsidies on children’s academic performance in junior high school, suggesting the positive shock to disposable income provided by the subsidies may be helping to improve children’s scholastic aptitude.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 8981.

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Date of creation: May 2012
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Handle: RePEc:cpr:ceprdp:8981

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  1. Care or Cash? The Effect of Child Care Subsidies on Student Performance
    by maximorossi in NEP-LTV blog on 2012-06-04 13:57:29
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Cited by:
  1. Christina Felfe & Rafael Lalive, 2012. "Early Child Care and Child Development: For Whom it Works and Why," CESifo Working Paper Series 4043, CESifo Group Munich.
  2. Christina Felfe & Natalia Nollenberger & Núria Rodríguez-Planas, 2013. "Can't Buy Mommy's Love? Universal Childcare and Children's Long-Term Cognitive Development," CESifo Working Paper Series 4069, CESifo Group Munich.
  3. Havnes, Tarjei & Mogstad, Magne, 2012. "Is Universal Child Care Leveling the Playing Field?," Memorandum 31/2012, Oslo University, Department of Economics.
  4. Herbst, Chris M., 2013. "Universal Child Care, Maternal Employment, and Children's Long-Run Outcomes: Evidence from the U.S. Lanham Act of 1940," IZA Discussion Papers 7846, Institute for the Study of Labor (IZA).

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