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Child Care Subsidies and Child Development

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Author Info
Chris M. Herbst
Erdal Tekin

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Abstract

Child care subsidies are an important part of federal and state efforts to move welfare recipients into employment. One of the criticisms of the current subsidy system, however, is that it overemphasizes work and does little to encourage parents to purchase high-quality child care. Consequently, there are reasons to be concerned about the implications of child care subsidies for child development. In this paper, we provide a systematic assessment of the impact of subsidy receipt on a wide range of child outcomes. Drawing on rich data from the Early Childhood Longitudinal Study, we document a negative relationship between child care subsidies and child development. In particular, our results suggest that subsidy receipt in the year before kindergarten lowers reading and math test scores and increases a variety of behavior problems at kindergarten entry. Some of these negative effects persist to the end of kindergarten. A tentative explanation for the poorer outcomes is that subsidized children are more likely to receive intense exposure to low-quality child care.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 14474.

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Date of creation: Nov 2008
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Handle: RePEc:nbr:nberwo:14474

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Find related papers by JEL classification:
I18 - Health, Education, and Welfare - - Health - - - Government Policy; Regulation; Public Health
I2 - Health, Education, and Welfare - - Education
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Raquel Bernal, 2008. "The Effect Of Maternal Employment And Child Care On Children'S Cognitive Development," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1173-1209, November. [Downloadable!] (restricted)
  2. Naci Mocan, 2007. "Can consumers detect lemons? An empirical analysis of information asymmetry in the market for child care," Journal of Population Economics, Springer, vol. 20(4), pages 743-780, October. [Downloadable!] (restricted)
  3. Herbst, Chris M., 2008. "Who are the eligible non-recipients of child care subsidies?," Children and Youth Services Review, Elsevier, vol. 30(9), pages 1037-1054, September. [Downloadable!] (restricted)
  4. Jean Kimmel, 1998. "Child Care Costs As A Barrier To Employment For Single And Married Mothers," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 287-299, May. [Downloadable!] (restricted)
  5. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, The Earned Income Tax Credit, And The Labor Supply Of Single Mothers," The Quarterly Journal of Economics, MIT Press, vol. 116(3), pages 1063-1114, August. [Downloadable!] (restricted)
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  6. 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. [Downloadable!] (restricted)
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  7. Christopher J. Ruhm, 2000. "Parental Employment and Child Cognitive Development," NBER Working Papers 7666, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  8. Blau, Francine D & Grossberg, Adam J, 1992. "Maternal Labor Supply and Children's Cognitive Development," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 474-81, August. [Downloadable!] (restricted)
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  9. Magnuson, Katherine A. & Ruhm, Christopher & Waldfogel, Jane, 2007. "Does prekindergarten improve school preparation and performance?," Economics of Education Review, Elsevier, vol. 26(1), pages 33-51, February. [Downloadable!] (restricted)
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  10. Michael Baker & Jonathan Gruber & Kevin Milligan, 2005. "Universal Childcare, Maternal Labor Supply, and Family Well-Being," NBER Working Papers 11832, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  11. Tekin, Erdal, 2004. "Single Mothers Working at Night: Standard Work, Child Care Subsidies, and Implications for Welfare Reform," IZA Discussion Papers 1014, Institute for the Study of Labor (IZA). [Downloadable!]
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  12. Jeffrey Grogger, 2003. "The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 394-408, 02. [Downloadable!] (restricted)
  13. Susanne James-Burdumy, 2005. "The Effect of Maternal Labor Force Participation on Child Development," Journal of Labor Economics, University of Chicago Press, vol. 23(1), pages 177-176, January. [Downloadable!]
  14. 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. [Downloadable!] (restricted)
  15. 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. [Downloadable!] (restricted)
  16. William T. Gormley, Jr. & Ted Gayer, 2005. "Promoting School Readiness in Oklahoma: An Evaluation of Tulsa's Pre-K Program," Journal of Human Resources, University of Wisconsin Press, vol. 40(3). [Downloadable!] (restricted)
  17. Christopher J. Ruhm, 2004. "Parental Employment and Child Cognitive Development," Journal of Human Resources, University of Wisconsin Press, vol. 39(1). [Downloadable!] (restricted)
  18. Wenjui Han & Jane Waldfogel, 2001. "Child Care Costs and Women's Employment: A Comparison of Single and Married Mothers With Pre-School-Aged Children," Social Science Quarterly, The Southwestern Social Science Association, vol. 82(3), pages 552-568. [Downloadable!] (restricted)
  19. Hanming Fang & Michael P. Keane, 2004. "Assessing the Impact of Welfare Reform on Single Mothers," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 35(2004-1), pages 1-116. [Downloadable!]
Full references

Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Francesconi, Marco & Rainer, Helmut & Van Der Klaauw, Wilbert, 2008. "Unintended Consequences of Welfare Reform: The Case of Divorced Parents," CEPR Discussion Papers 7107, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  2. Chris M. Herbst & Erdal Tekin, 2009. "Child Care Subsidies and Childhood Obesity," NBER Working Papers 15007, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
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