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The Determinants and Consequences of Child Care Subsidies for Single Mothers

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  • David Blau
  • Erdal Tekin

Abstract

This paper provides an analysis of child care subsidies under welfare reform. Previous studies of child care subsidies use data from the pre-welfare-reform period, and their results may not apply to the very different post-reform environment. We use data from the 1999 National Survey of America's Families to analyze the determinants of receipt of a child care subsidy and the effects of subsidy receipt on employment, school attendance, job search, and welfare participation. We analyze the impact on subsidy receipt of household characteristics such as family size and structure, and past participation in welfare. The most important determinant of receipt of a child care subsidy is past receipt, but we cannot determine from our analysis whether this is a causal effect or a result of unobserved heterogeneity. Ordinary least squares estimates that treat subsidy receipt as exogenous show an effect of subsidy receipt of about 13 percentage points on employment. Two stage least squares estimates that treat subsidy receipt as endogenous and use county dummies as identifying instruments show an effect of 32 percentage points. We present some evidence that is consistent with the assumption that county dummies are valid identifying instruments, and some evidence that is inconsistent with the assumption.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 9665.

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Date of creation: May 2003
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Publication status: published as Blau, David and Erdal Tekin. “The Determinants and Consequences of Child Care Subsidies for Single Mothers in the USA." Journal of Population Economics 20, 4 (2007): 719-741.
Handle: RePEc:nbr:nberwo:9665

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  1. James Heckman, 1997. "Instrumental Variables: A Study of Implicit Behavioral Assumptions Used in Making Program Evaluations," Journal of Human Resources, University of Wisconsin Press, vol. 32(3), pages 441-462.
  2. Rebecca M. Blank, 2002. "Evaluating Welfare Reform in the United States," Journal of Economic Literature, American Economic Association, vol. 40(4), pages 1105-1166, December.
  3. Patricia M. Anderson & Philip B. Levine, 1999. "Child Care and Mothers' Employment Decisions," NBER Working Papers 7058, National Bureau of Economic Research, Inc.
  4. Robins, Philip K & Spiegelman, Robert G, 1978. "An Econometric Model of the Demand for Child Care," Economic Inquiry, Western Economic Association International, vol. 16(1), pages 83-94, January.
  5. Marcia Meyers & Theresa Heintze & Douglas Wolf, 2002. "Child care subsidies and the employment of welfare recipients," Demography, Springer, vol. 39(1), pages 165-179, February.
  6. Robert J. Lemke & Ann Dryden Witte & Magaly Queralt & Robert Witt, 2000. "Child Care and the Welfare to Work Transition," NBER Working Papers 7583, National Bureau of Economic Research, Inc.
  7. Joshua Angrist & Alan Krueger, 1998. "Empirical Strategies in Labor Economics," Working Papers 780, Princeton University, Department of Economics, Industrial Relations Section..
  8. Joshua D. Angrist & Guido W. Imbens, 1999. "Comment on James J. Heckman, "Instrumental Variables: A Study of Implicit Behavioral Assumptions Used in Making Program Evaluations"," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 823-827.
  9. Berger, Mark C & Black, Dan A, 1992. "Child Care Subsidies, Quality of Care, and the Labor Supply of Low-Income, Single Mothers," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 635-42, November.
  10. James J. Heckman, 1999. "Instrumental Variables: Response to Angrist and Imbens," Journal of Human Resources, University of Wisconsin Press, vol. 34(4), pages 828-837.
  11. Jonah B. Gelbach, 2002. "Public Schooling for Young Children and Maternal Labor Supply," American Economic Review, American Economic Association, vol. 92(1), pages 307-322, March.
  12. 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.
  13. David Blau, 2003. "Child Care Subsidy Programs," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 443-516 National Bureau of Economic Research, Inc.
  14. 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.
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Cited by:
  1. Beissinger, Thomas, 2002. "The Impact of Labor Market Reforms on Capital Flows, Wages and Unemployment," Royal Economic Society Annual Conference 2002 18, Royal Economic Society.
  2. David Blau & Janet Currie, 2004. "Preschool, Day Care, and Afterschool Care: Who's Minding the Kids?," NBER Working Papers 10670, National Bureau of Economic Research, Inc.
  3. 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.
  4. Pablo D. López Zadicoff & Jorge A. Paz, 2003. "El Programa Jefes de Hogar. Eligibilidad, participación y trabajo," CEMA Working Papers: Serie Documentos de Trabajo. 242, Universidad del CEMA.
  5. Robert J. Lemke & Robert J. Witt & Ann Dryden Witte, 2004. "The Transition from Welfare to Work," School of Economics Discussion Papers 0504, School of Economics, University of Surrey.
  6. Maria Fitzpatrick, 2008. "Preschoolers Enrolled and Mothers at Work? The Effects of Universal Pre-Kindergarten," Discussion Papers 08-001, Stanford Institute for Economic Policy Research.
  7. David M. Blau, 2000. "Child Care Subsidy Programs," NBER Working Papers 7806, National Bureau of Economic Research, Inc.
  8. C. Katharina Spieß, 2011. "Vereinbarkeit von Familie und Beruf – wie wirksam sind deutsche „Care Policies“?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 4-27, 05.
  9. Peter R. Mueser & Christopher T. King, 2004. "Welfare and Work in the 1990s: Experiences in Six Cities," Working Papers 0409, Department of Economics, University of Missouri, revised 20 Oct 2004.
  10. Ashlesha Datar, 2006. "The impact of kindergarten entrance age policies on the childcare needs of families," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(1), pages 129-153.

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