Mother's time allocation, child care and child cognitive development

This paper analyzes the effects of maternal time allocation between work, child care, and leisure and non-parental child care on a child's cognitive development. By using data for the US from the Panel Study of Income Dynamics, we estimate a model that takes into account the heterogeneity in a mother's child-care productivity induced by her level of education and the various impacts of non-parental child care given by the different child care types available in the market. The results show that mothers with at least some college education are more effective than their less-educated counterparts in boosting their children's cognitive skills through their child-care time. Moreover, formal child care is found to be more productive than informal child care, especially during a child's first years of life. The simulation of policies aimed at increasing mothers' labor supply or at regulating the non-parental child care market shows that the effects on the children's cognitive outcomes are greater for the children of less educated mothers, but may be negative for the children of the highly educated, who benefit less from replacing their mother's time with the alternative care provider's time.