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The Rug Rat Race

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  • Garey Ramey
  • Valerie A. Ramey

Abstract

After three decades of decline, the amount of time spent by parents on childcare in the U.S. began to rise dramatically in the mid-1990s. Moreover, the rise in childcare time was particularly pronounced among college-educated parents. Why would highly educated parents increase the amount of time they allocate to childcare at the same time that their own market returns have skyrocketed? After finding no empirical support for standard explanations, such as selection or income effects, we offer a new explanation. We argue that increased competition for college admissions may be an important source of these trends. The number of college-bound students has surged in recent years, coincident with the rise in time spent on childcare. The resulting “cohort crowding” has led parents to compete more aggressively for college slots by spending increasing amounts of time on college preparation. Our theoretical model shows that, since college-educated parents have a comparative advantage in college preparation, rivalry leads them to increase preparation time by a greater amount than less-educated parents. We provide empirical support for our explanation with a comparison of trends between the U.S. and Canada, and a comparison across racial groups in the U.S.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 15284.

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Date of creation: Aug 2009
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Publication status: published as Garey Ramey & Valerie A. Ramey, 2010. "The Rug Rat Race," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(1 (Spring), pages 129-199.
Handle: RePEc:nbr:nberwo:15284

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References

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  1. Lawrence F. Katz & Kevin M. Murphy, 1991. "Changes in Relative Wages, 1963-1987: Supply and Demand Factors," NBER Working Papers 3927, National Bureau of Economic Research, Inc.
  2. Mark Aguiar & Erik Hurst, 2006. "Measuring Trends in Leisure: The Allocation of Time Over Five Decades," NBER Working Papers 12082, National Bureau of Economic Research, Inc.
  3. John Bound & Sarah Turner, 2006. "Cohort Crowding: How Resources Affect Collegiate Attainment," NBER Working Papers 12424, National Bureau of Economic Research, Inc.
  4. David H. Autor & Lawrence F. Katz & Melissa S. Kearney, 2008. "Trends in U.S. Wage Inequality: Revising the Revisionists," The Review of Economics and Statistics, MIT Press, vol. 90(2), pages 300-323, May.
  5. Jonathan Guryan & Erik Hurst & Melissa Kearney, 2008. "Parental Education and Parental Time with Children," Journal of Economic Perspectives, American Economic Association, vol. 22(3), pages 23-46, Summer.
  6. Alan B. Krueger & Daniel Kahneman & David Schkade & Norbert Schwarz & Arthur A. Stone, 2008. "National Time Accounting: The Currency of Life," Working Papers 1061, Princeton University, Department of Economics, Industrial Relations Section..
    • Alan B. Krueger & Daniel Kahneman & David Schkade & Norbert Schwarz & Arthur A. Stone, 2009. "National Time Accounting: The Currency of Life," NBER Chapters, in: Measuring the Subjective Well-Being of Nations: National Accounts of Time Use and Well-Being, pages 9-86 National Bureau of Economic Research, Inc.
  7. John Bound & Brad Hershbein & Bridget Terry Long, 2009. "Playing the Admissions Game: Student Reactions to Increasing College Competition," Journal of Economic Perspectives, American Economic Association, vol. 23(4), pages 119-46, Fall.
  8. Zvi Eckstein & Éva Nagypál, 2004. "The evolution of U.S. earnings inequality: 1961?2002," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Dec, pages 10-29.
  9. Jean Kimmel & Rachel Connelly, 2007. "Mothers’ Time Choices: Caregiving, Leisure, Home Production, and Paid Work," Journal of Human Resources, University of Wisconsin Press, vol. 42(3).
  10. Caroline M. Hoxby, 1997. "How the Changing Market Structure of U.S. Higher Education Explains College Tuition," NBER Working Papers 6323, National Bureau of Economic Research, Inc.
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Cited by:
  1. Christian Siegel, 2013. "Female Employment and Fertility: The Effects of Rising Female Wages," 2013 Meeting Papers 1058, Society for Economic Dynamics.
  2. Jonathan Guryan & Erik Hurst & Melissa Schettini Kearney, 2008. "Parental Education and Parental Time With Children," NBER Working Papers 13993, National Bureau of Economic Research, Inc.
  3. Ed Hopkins, 2012. "Job Market Signaling Of Relative Position, Or Becker Married To Spence," Journal of the European Economic Association, European Economic Association, vol. 10(2), pages 290-322, 04.
  4. Kertesi, Gábor & Kézdi, Gábor, 2012. "A roma és nem roma tanulók teszteredményei közti különbségekről és e különbségek okairól
    [The Roma/non-Roma test-score gap in Hungarian education]
    ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 798-853.
  5. Gabor Kertesi & Gabor Kezdi, 2014. "On the test score gap between Roma and non-Roma students in Hungary and its potential causes," Budapest Working Papers on the Labour Market 1401, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  6. Paula GOBBI, 2013. "Childcare and Commitment within Households," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2013019, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  7. Zhu, Guozhong & Vural, Gulfer, 2013. "Inter-generational effect of parental time and its policy implications," Journal of Economic Dynamics and Control, Elsevier, vol. 37(9), pages 1833-1851.
  8. Christopher L. Smith, 2011. "Polarization, immigration, education: What's behind the dramatic decline in youth employment?," Finance and Economics Discussion Series 2011-41, Board of Governors of the Federal Reserve System (U.S.).
  9. Minagawa, Junichi & Upmann, Thorsten, 2013. "A note on parental time allocation," Labour Economics, Elsevier, vol. 25(C), pages 153-157.
  10. C. Fan & Jie Zhang, 2013. "Differential fertility and intergenerational mobility under private versus public education," Journal of Population Economics, Springer, vol. 26(3), pages 907-941, July.

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