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The Impact of Child Care Subsidies on Child Well-Being: Evidence from Geographic Variation in the Distance to Social Service Agencies

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  • Herbst, Chris M.

    ()
    (Arizona State University)

  • Tekin, Erdal

    ()
    (Georgia State University)

Abstract

In recent years, child care subsidies have become an integral part of federal and state efforts to move economically disadvantaged parents from welfare to work. Although previous empirical studies consistently show that these employment-related subsidies raise work levels among this group, little is known about the impact of subsidy receipt on child well-being. In this paper, we identify the causal effect of child care subsidies on child development by exploiting geographic variation in the distance that families must travel from home in order to reach the nearest social service agency that administers the subsidy application process. Using data from the Kindergarten cohort of the Early Childhood Longitudinal Study, our instrumental variables estimates suggest that children receiving subsidized care in the year before kindergarten score lower on tests of cognitive ability and reveal more behavior problems throughout kindergarten. However, these negative effects largely disappear by the time children reach the end of third grade. Our results point to an unintended consequence of a child care subsidy regime that conditions eligibility on parental employment and deemphasizes child care quality.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 5102.

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Length: 63 pages
Date of creation: Jul 2010
Date of revision:
Handle: RePEc:iza:izadps:dp5102

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Keywords: development; subsidy; child care;

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References

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Citations

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Cited by:
  1. Chris M. Herbst & Erdal Tekin, 2012. "Child Care Subsidies, Maternal Well-Being, and Child-Parent Interactions: Evidence from Three Nationally Representative Datasets," NBER Working Papers 17774, National Bureau of Economic Research, Inc.
  2. Guner, Nezih & Kaygusuz, Remzi & Ventura, Gustavo, 2014. "Childcare Subsidies and Household Labor Supply," IZA Discussion Papers 8303, Institute for the Study of Labor (IZA).
  3. Clive R. Belfield & Inas Rashad Kelly, 2010. "The Benefits of Breastfeeding Across the Early Years of Childhood," NBER Working Papers 16496, National Bureau of Economic Research, Inc.
  4. Johnson, Anna D. & Herbst, Chris M., 2013. "Can we trust parental reports of child care subsidy receipt?," Children and Youth Services Review, Elsevier, vol. 35(6), pages 984-993.
  5. Herbst, Chris M. & Tekin, Erdal, 2011. "Do child care subsidies influence single mothers' decision to invest in human capital?," Economics of Education Review, Elsevier, vol. 30(5), pages 901-912, October.
  6. Black, Sandra E. & Devereux, Paul J. & Løken, Katrine V. & Salvanes, Kjell G., 2012. "Care Or Cash? The Effect Of Child Care Subsidies On Student Performance," Working Papers in Economics 09/12, University of Bergen, Department of Economics.
  7. DeCicca, Philip & Smith, Justin, 2013. "The long-run impacts of early childhood education: Evidence from a failed policy experiment," Economics of Education Review, Elsevier, vol. 36(C), pages 41-59.
  8. 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).
  9. Lipscomb, Shannon T. & Lewis, Kendra M. & Masyn, Katherine E. & Meloy, Mary Elizabeth, 2012. "Child care assistance for families involved in the child welfare system: Predicting child care subsidy use and stability," Children and Youth Services Review, Elsevier, vol. 34(12), pages 2454-2463.
  10. Rossin-Slater, Maya, 2013. "WIC in your neighborhood: New evidence on the impacts of geographic access to clinics," Journal of Public Economics, Elsevier, vol. 102(C), pages 51-69.
  11. Herbst, Chris M., 2013. "The impact of non-parental child care on child development: Evidence from the summer participation “dip”," Journal of Public Economics, Elsevier, vol. 105(C), pages 86-105.
  12. Herbst, Chris M. & Tekin, Erdal, 2011. "The Geographic Accessibility of Child Care Subsidies and Evidence on the Impact of Subsidy Receipt on Childhood Obesity," IZA Discussion Papers 6025, Institute for the Study of Labor (IZA).
  13. Herbst, Chris M., 2012. "The Impact of Non-Parental Child Care on Child Development: Evidence from the Summer Participation "Dip"," IZA Discussion Papers 7039, Institute for the Study of Labor (IZA).

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