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Is Universal Child Care Leveling the Playing Field? Evidence from Non-Linear Difference-in-Differences

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Author Info

  • Havnes, Tarjei

    ()
    (University of Oslo)

  • Mogstad, Magne

    ()
    (University of Chicago)

Abstract

Advocates of a universal child care system offer a two-fold argument: Child care facilitates children's long-run development, and levels the playing field by benefiting in particular disadvantaged children. Therefore, a critical element in evaluating universal child care systems is to measure the impact on child development in a way that allows the effects to vary systematically over the outcome distribution. Using non-linear DD methods, we investigate how the introduction of large-scale, publicly subsidized child care in Norway affected the earnings distribution of exposed children as adults. We find that mean impacts miss a lot: While child care had a small and insignificant mean impact, effects were positive over the bulk of the earnings distribution, and sizable below the median. This is an important observation since previous empirical studies of universal child care have focused on mean impacts. We further demonstrate that the essential features of our empirical findings could not have been revealed using mean impact analysis on typically defined subgroups. This is because the intragroup variation in the child care effects is relatively large compared to the intergroup variation in mean impacts.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4978.

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Length: 47 pages
Date of creation: May 2010
Date of revision:
Publication status: forthcoming in: Journal of Public Economics
Handle: RePEc:iza:izadps:dp4978

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Related research

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

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Cited by:
  1. Havnes, Tarjei & Mogstad, Magne, 2011. "Money for nothing? Universal child care and maternal employment," Journal of Public Economics, Elsevier, vol. 95(11), pages 1455-1465.
  2. Alessandra Casarico & Luca Micheletto & Alessandro Sommacal, 2011. "Intergenerational Transmission of Skills during Childhood and Optimal Public Policy," CESifo Working Paper Series 3343, CESifo Group Munich.
  3. Ylenia Brilli & Daniela Del Boca & Chiara Pronzato, 2011. "Exploring the impacts of public childcare on mothers and children in Italy: does rationing play a role?," Carlo Alberto Notebooks 214, Collegio Carlo Alberto.
  4. 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).
  5. Casarico, Alessandra & Sommacal, Alessandro, 2008. "Labour Income Taxation, Human Capital and Growth: The Role of Child Care," CEPR Discussion Papers 7039, C.E.P.R. Discussion Papers.
  6. Ylenia Brilli & Daniela Del Boca & Chiara Monfardini, 2013. "Child Care Arrangements: Determinants and Consequences," CHILD Working Papers Series 18, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
  7. Foureaux Koppensteiner, Martin, 2014. "Automatic grade promotion and student performance: Evidence from Brazil," Journal of Development Economics, Elsevier, vol. 107(C), pages 277-290.
  8. Christian N. Brinch & Erik Hernæs & Zhiyang Jia, 2012. "Labor supply on the eve of retirement. Disparate effects of immediate and postponed rewards to working," Discussion Papers 698, Research Department of Statistics Norway.
  9. Emilia Del Bono & Marco Francesconi & Yvonne Kelly & Amanda Sacker, 2013. "Understanding the SES Gradient in Early Child Development: Maternal Work, Home Learning, and Child Care Decisions," Economics Discussion Papers 726, University of Essex, Department of Economics.
  10. Pieroni, Luca & Salmasi, Luca, 2012. "Does cigarette smoking affect body weight? causal estimates from the clean indoor air law discontinuity," MPRA Paper 38338, University Library of Munich, Germany.
  11. Esping-Andersen, Gosta & Garfinkel, Irwin & Han, Wen-Jui & Magnuson, Katherine & Wagner, Sander & Waldfogel, Jane, 2012. "Child care and school performance in Denmark and the United States," Children and Youth Services Review, Elsevier, vol. 34(3), pages 576-589.

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