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The Impact of Regulations on the Supply and Quality of Care in Child Care Markets

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  • V. Joseph Hotz
  • Mo Xiao

Abstract

We examine the impact of state child care regulations on the supply and quality of care in child care markets. We exploit panel data on both individual establishments and local markets to control for state, time, and, where possible, establishment-specific fixed effects to mitigate the potential bias due to policy endogeneity. We find that the imposition of regulations reduces the number of center-based child care establishments, especially in lower income markets. However, such regulations increase the quality of services provided, especially in higher income areas. Thus, there are winners and losers from the regulation of child care services.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11873.

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Date of creation: Dec 2005
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Publication status: published as 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.
Handle: RePEc:nbr:nberwo:11873

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Cited by:
  1. John Bowblis & Judith Lucas, 2012. "The impact of state regulations on nursing home care practices," Journal of Regulatory Economics, Springer, vol. 42(1), pages 52-72, August.
  2. 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.
  3. Kawaguchi, Daiji & Murao, Tetsushi & Kambayashi, Ryo, 2013. "Incidence of Strict Quality Standards: Protection of Consumers or Windfall for Professionals?," IZA Discussion Papers 7443, Institute for the Study of Labor (IZA).
  4. Stange, Kevin, 2014. "How does provider supply and regulation influence health care markets? Evidence from nurse practitioners and physician assistants," Journal of Health Economics, Elsevier, vol. 33(C), pages 1-27.
  5. 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.

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