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Care Or Cash? The Effect Of Child Care Subsidies On Student Performance

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Author Info

  • Black, Sandra E.

    () (University of Texas at Austin)

  • Devereux, Paul J.

    () (University College Dublin)

  • Løken, Katrine V.

    () (University of Bergen)

  • Salvanes, Kjell G.

    () (Norwegian School of Economics)

Abstract

Many countries have implemented childcare subsidies in an effort to help families; in the United States, the government created the Child Care and Development Fund in 1996, which provides public funds for childcare assistance to low-income families. Despite the importance of the issue, little is known about the effect of childcare subsidies on parent and child outcomes. Research in this area has been limited because of the difficulty identifying the causal effect of childcare price on later outcomes; for example, higher childcare prices may be associated with better childcare or wealthier parents, in which case one cannot isolate the effect of price alone on later child outcomes. This paper uses recent data and a novel source of identifying variation--sharp discontinuities in the price of childcare by income in Norway--to identify the effect of childcare subsidies on parental behavior and the later academic achievement of children. There are a number of papers that have examined the effect of childcare subsidies on female labor force participation, with the findings ranging from no effect to significant negative effects (See Blau, 2000, for a summary). More recently, work by Herbst and Tekin (2010b) has examined the effect of childcare subsidies in the United States on children’s academic performance.1 They use a unique identification strategy, applying distance to the nearest social service agency that administers the subsidy application process as an instrument for subsidy receipt. They find small negative effects of subsidy receipt the year before kindergarten on kindergarten performance, although these negative effects have generally disappeared by third grade.2 Our work complements this

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Bibliographic Info

Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 09/12.

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Length: 54 pages
Date of creation: 30 May 2012
Date of revision:
Handle: RePEc:hhs:bergec:2012_009

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Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Phone: (+47)55589200
Fax: (+47)55589210
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Web page: http://www.uib.no/econ/en
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Keywords: Education; income subsidy; child care;

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References

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  1. David M. Blau, 1999. "The Effect Of Income On Child Development," The Review of Economics and Statistics, MIT Press, vol. 81(2), pages 261-276, May.
  2. 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.
  3. David S. Lee & Thomas Lemieux, 2009. "Regression Discontinuity Designs in Economics," NBER Working Papers 14723, National Bureau of Economic Research, Inc.
  4. David M. Blau, 2000. "Child Care Subsidy Programs," NBER Working Papers 7806, National Bureau of Economic Research, Inc.
  5. Tekin, Erdal, 2003. "Child Care Subsidies, Wages, And Employment of Single Mothers," Royal Economic Society Annual Conference 2003 200, Royal Economic Society.
  6. Katrine V. L�ken & Magne Mogstad & Matthew Wiswall, 2012. "What Linear Estimators Miss: The Effects of Family Income on Child Outcomes," American Economic Journal: Applied Economics, American Economic Association, vol. 4(2), pages 1-35, April.
  7. David Blau & Erdal Tekin, 2007. "The determinants and consequences of child care subsidies for single mothers in the USA," Journal of Population Economics, Springer, vol. 20(4), pages 719-741, October.
  8. Ann Huff Stevens & Marianne Page & Philip Oreopoulos, 2005. "The Intergenerational Effects of Worker Displacement," Working Papers 521, University of California, Davis, Department of Economics.
  9. Blanchflower, David G & Oswald, Andrew J, 1998. "What Makes an Entrepreneur?," Journal of Labor Economics, University of Chicago Press, vol. 16(1), pages 26-60, January.
  10. Samuel Berlinski & Sebastian Galiani & Marco Manacorda, 2007. "Giving Children a Better Start: Preschool Attendance and School-Age Profiles," Working Papers 618, Queen Mary, University of London, School of Economics and Finance.
  11. 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.
  12. Ludwig, Jens & Miller, Douglas L., 2005. "Does Head Start Improve Children's Life Chances? Evidence from a Regression Discontinuity Design," Working Papers 05-34, University of California at Davis, Department of Economics.
  13. Milligan, Kevin & Stabile, Mark, 2007. "The integration of child tax credits and welfare: Evidence from the Canadian National Child Benefit program," Journal of Public Economics, Elsevier, vol. 91(1-2), pages 305-326, February.
  14. Janet Currie, 2008. "Healthy, Wealthy, and Wise: Socioeconomic Status, Poor Health in Childhood, and Human Capital Development," NBER Working Papers 13987, National Bureau of Economic Research, Inc.
  15. Becker, Gary S & Tomes, Nigel, 1979. "An Equilibrium Theory of the Distribution of Income and Intergenerational Mobility," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1153-89, December.
  16. Maria Donovan Fitzpatrick, 2010. "Preschoolers Enrolled and Mothers at Work? The Effects of Universal Prekindergarten," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 51-85, 01.
  17. Guido Imbens & Karthik Kalyanaraman, 2009. "Optimal Bandwidth Choice for the Regression Discontinuity Estimator," NBER Working Papers 14726, National Bureau of Economic Research, Inc.
  18. repec:oup:restud:v:79:y::i:3:p:933-959 is not listed on IDEAS
  19. James Heckman & Pedro Carneiro, 2003. "Human Capital Policy," NBER Working Papers 9495, National Bureau of Economic Research, Inc.
  20. Hahn, Jinyong & Todd, Petra & Van der Klaauw, Wilbert, 2001. "Identification and Estimation of Treatment Effects with a Regression-Discontinuity Design," Econometrica, Econometric Society, vol. 69(1), pages 201-09, January.
  21. Shea, John, 2000. "Does parents' money matter?," Journal of Public Economics, Elsevier, vol. 77(2), pages 155-184, August.
  22. Dan Maurice Levy & Greg Duncan, 2000. "Using Sibling Samples to Assess the Effect of Childhood Family Income on Completed Schooling," JCPR Working Papers 168, Northwestern University/University of Chicago Joint Center for Poverty Research.
  23. Samuel Berlinski & Sebastian Galiani & Paul Gertler, 2006. "The effect of pre-primary education on primary school performance," IFS Working Papers W06/04, Institute for Fiscal Studies.
  24. Gordon B. Dahl & Lance Lochner, 2005. "The Impact of Family Income on Child Achievement," NBER Working Papers 11279, National Bureau of Economic Research, Inc.
  25. Pål Schøne, 2004. "Labour supply effects of a cash-for-care subsidy," Journal of Population Economics, Springer, vol. 17(4), pages 703-727, December.
  26. Loken, Katrine Vellesen & Mogstad, Magne & Wiswall, Matthew, 2010. "What Linear Estimators Miss: Re-Examining the Effects of Family Income on Child Outcomes," IZA Discussion Papers 4971, Institute for the Study of Labor (IZA).
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As found by EconAcademics.org, the blog aggregator for Economics research:
  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
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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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. Havnes, Tarjei & Mogstad, Magne, 2012. "Is Universal Child Care Leveling the Playing Field?," Memorandum 31/2012, Oslo University, Department of Economics.
  3. 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.

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