IDEAS home Printed from https://ideas.repec.org/p/iza/izadps/dp14684.html
   My bibliography  Save this paper

Minimum Quality Regulations and the Demand for Child Care Labor

Author

Listed:
  • Ali, Umair

    (Center for Evaluation and Development (C4ED))

  • Herbst, Chris M.

    (Arizona State University)

  • Makridis, Christos A.

    (Arizona State University)

Abstract

Minimum quality regulations are often justified in the child care market because of the presence of information frictions between parents and providers. However, regulations can also have unintended consequences for the quantity and quality of services provided. In this paper, we merge new data on states' child care regulations for maximum classroom group sizes and child-to-staff ratios with the universe of online job postings to study the impact of regulations on the demand for and characteristics of child care labor. Our identification strategy exploits the unprecedented variation in regulatory reform during the COVID-19 pandemic, relying on changes both within states over time and across children's age groups. We find robust evidence that these regulations reduce the number of child care job postings and encourage providers to substitute away from higher-skilled postings, thereby increasing the number of positions that are out-of-compliance with state law. Furthermore, we show that regulations adversely affect mothers' labor force participation. In sum, the results imply that child care regulations may reduce the demand for child care labor, while simultaneously altering the composition of the workforce.

Suggested Citation

  • Ali, Umair & Herbst, Chris M. & Makridis, Christos A., 2021. "Minimum Quality Regulations and the Demand for Child Care Labor," IZA Discussion Papers 14684, Institute of Labor Economics (IZA).
    • Handle: RePEc:iza:izadps:dp14684
    as

    Download full text from publisher

    File URL: https://docs.iza.org/dp14684.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. William T. Gormley, 1991. "State regulations and the availability of child-care services," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 10(1), pages 78-95.
    2. Del Boca, Daniela & Oggero, Noemi & Profeta, Paola & Rossi, Maria Cristina, 2020. "Women's Work, Housework and Childcare, before and during COVID-19," IZA Discussion Papers 13409, Institute of Labor Economics (IZA).
    3. Leland, Hayne E, 1979. "Quacks, Lemons, and Licensing: A Theory of Minimum Quality Standards," Journal of Political Economy, University of Chicago Press, vol. 87(6), pages 1328-1346, December.
    4. Chipty, Tasneem, 1995. "Economic Effects of Quality Regulations in the Day-Care Industry," American Economic Review, American Economic Association, vol. 85(2), pages 419-424, May.
    5. Ali, Umair & Herbst, Chris M. & Makridis, Christos A., 2021. "The impact of COVID-19 on the U.S. child care market: Evidence from stay-at-home orders," Economics of Education Review, Elsevier, vol. 82(C).
    6. 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.
    7. Alison P. Hagy, 1998. "The Demand for Child Care Quality: An Hedonic Price Theory Approach," Journal of Human Resources, University of Wisconsin Press, vol. 33(3), pages 683-710.
    8. V. Joseph Hotz & M. Rebecca Kilburn, "undated". "Regulating Child Care: The Effects of State Regulations on Child Care Demand and Its Cost," University of Chicago - Population Research Center 94-10, Chicago - Population Research Center.
    9. Currie, Janet & Hotz, V. Joseph, 2004. "Accidents will happen?: Unintentional childhood injuries and the effects of child care regulations," Journal of Health Economics, Elsevier, vol. 23(1), pages 25-59, January.
    10. Blau, David M., 2007. "Unintended consequences of child care regulations," Labour Economics, Elsevier, vol. 14(3), pages 513-538, June.
    11. V. Joseph Hotz & Mo Xiao, 2011. "The Impact of Regulations on the Supply and Quality of Care in Child Care Markets," American Economic Review, American Economic Association, vol. 101(5), pages 1775-1805, August.
    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. Boyd-Swan, Casey & Herbst, Chris M., 2018. "The demand for teacher characteristics in the market for child care: Evidence from a field experiment," Journal of Public Economics, Elsevier, vol. 159(C), pages 183-202.
    14. Daniela Del Boca & Noemi Oggero & Paola Profeta & Maria Cristina Rossi, 2020. "Women’s Work, Housework and Childcare, before and during COVID-19," Carlo Alberto Notebooks 613, Collegio Carlo Alberto.
    15. Blau, David & Currie, Janet, 2006. "Pre-School, Day Care, and After-School Care: Who's Minding the Kids?," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 20, pages 1163-1278, Elsevier.
    16. Carl Shapiro, 1986. "Investment, Moral Hazard, and Occupational Licensing," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 53(5), pages 843-862.
    17. David M. Blau, 2003. "Do child care regulations affect the child care and labor markets?," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 22(3), pages 443-465.
    18. Brown, Jessica H. & Herbst, Chris M., 2021. "Child Care over the Business Cycle," IZA Discussion Papers 14048, Institute of Labor Economics (IZA).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. 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.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Herbst, Chris M., 2022. "Child Care in the United States: Markets, Policy, and Evidence," IZA Discussion Papers 15547, Institute of Labor Economics (IZA).
    2. 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.
    3. V. Joseph Hotz & Mo Xiao, 2011. "The Impact of Regulations on the Supply and Quality of Care in Child Care Markets," American Economic Review, American Economic Association, vol. 101(5), pages 1775-1805, August.
    4. V. Joseph Hotz & Mo Xiao, 2005. "The Impact of Minimum Quality Standards on Firm Entry, Exit and Product Quality: The Case of the Child Care Market," Working Papers 05-28, Center for Economic Studies, U.S. Census Bureau.
    5. Blau, David M., 2007. "Unintended consequences of child care regulations," Labour Economics, Elsevier, vol. 14(3), pages 513-538, June.
    6. Haizhen Lin, 2010. "Do Minimum Quality Standards Improve Quality? A Case Study of the Nursing Home Industry," Working Papers 2010-01, Indiana University, Kelley School of Business, Department of Business Economics and Public Policy.
    7. Blau, David & Currie, Janet, 2006. "Pre-School, Day Care, and After-School Care: Who's Minding the Kids?," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 20, pages 1163-1278, Elsevier.
    8. Bastos, Paulo & Cristia, Julian, 2012. "Supply and quality choices in private child care markets: Evidence from São Paulo," Journal of Development Economics, Elsevier, vol. 98(2), pages 242-255.
    9. Daiji Kawaguchi & Tetsushi Murao & Ryo Kambayashi, 2014. "Incidence of Strict Quality Standards: Protection of Consumers or Windfall for Professionals?," Journal of Law and Economics, University of Chicago Press, vol. 57(1), pages 195-224.
    10. Zierow, Larissa, 2017. "Regulating Child Care Markets. Center-based Care vs. Family Day-Care in Germany," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168052, Verein für Socialpolitik / German Economic Association.
    11. Herbst, Chris M., 2015. "The Rising Cost of Child Care in the United States: A Reassessment of the Evidence," IZA Discussion Papers 9072, Institute of Labor Economics (IZA).
    12. Currie, Janet & Hotz, V. Joseph, 2004. "Accidents will happen?: Unintentional childhood injuries and the effects of child care regulations," Journal of Health Economics, Elsevier, vol. 23(1), pages 25-59, January.
    13. Boyd-Swan, Casey & Herbst, Chris M., 2017. "Racial and Ethnic Discrimination in the Labor Market for Child Care Teachers," IZA Discussion Papers 11140, Institute of Labor Economics (IZA).
    14. David Blau, 2003. "Child Care Subsidy Programs," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 443-516, National Bureau of Economic Research, Inc.
    15. Herbst, Chris M., 2018. "The rising cost of child care in the United States: A reassessment of the evidence," Economics of Education Review, Elsevier, vol. 64(C), pages 13-30.
    16. Marek Zapletal, 2017. "The Effects of Occupational Licensing Evidence from Detailed Business-Level Data," Working Papers 17-20, Center for Economic Studies, U.S. Census Bureau.
    17. Tim R. Sass, 2015. "Licensure and Worker Quality: A Comparison of Alternative Routes to Teaching," Journal of Law and Economics, University of Chicago Press, vol. 58(1), pages 1-35.
    18. Y.E. Akgündüz & J. Plantenga, 2015. "Childcare Prices and Maternal Employment: a Meta-Analysis," Working Papers 15-14, Utrecht School of Economics.
    19. Larissa Zierow, 2017. "Economic Perspectives on the Implications of Public Child Care and Schooling for Educational Outcomes in Childhood and Adult Life," ifo Beiträge zur Wirtschaftsforschung, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 76.
    20. Brown, Jessica H. & Herbst, Chris M., 2021. "Child Care over the Business Cycle," IZA Discussion Papers 14048, Institute of Labor Economics (IZA).

    More about this item

    Keywords

    child care; COVID-19; employment; state regulation; women;
    All these keywords.

    JEL classification:

    • H75 - Public Economics - - State and Local Government; Intergovernmental Relations - - - State and Local Government: Health, Education, and Welfare
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:iza:izadps:dp14684. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Holger Hinte (email available below). General contact details of provider: https://edirc.repec.org/data/izaaade.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.