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Is Universal Child Care Leveling the Playing Field?

  • Tarjei Havnes
  • Magne Mogstad

Many developed countries currently consider a move towards a universal child care program. The challenge in assessing the case for universal child care programs is that the evidence base is scarce. We analyze the staged expansion of subsidized, universally accessible child care in Norway. Our approach differs from existing literature which estimate mean impacts of universal child care programs; in contrast, we use non-linear difference-in-differences methods to estimate quantile treatment effects, showing how the child care expansion affected the earnings distribution of exposed children as adults. We complement these estimates with local linear regressions of the child care effects by family income. Our findings suggest that the effects of child care vary systematically across the earnings distribution, that the mean impact misses a lot, and that children of low income parents seem to be the primary beneficiaries of subsidized child care. These findings are important when considering the case for universal child care programs, since the benefits of providing subsidized child care to middle and upper-class children are unlikely to exceed the costs. To help understand the differential effects on earnings, we examine how the child care expansion affected the educational trajectories and cognitive test scores of the exposed children.

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Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 4014.

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Date of creation: 2012
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Handle: RePEc:ces:ceswps:_4014
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  17. Datta Gupta, Nabanita & Simonsen, Marianne, 2007. "Non-Cognitive Child Outcomes and Universal High Quality Child Care," IZA Discussion Papers 3188, Institute for the Study of Labor (IZA).
  18. Havnes, Tarjei & Mogstad, Magne, 2009. "Money for Nothing? Universal Child Care and Maternal Employment," Memorandum 24/2009, Oslo University, Department of Economics.
  19. Susan Athey & Guido W. Imbens, 2002. "Identification and Inference in Nonlinear Difference-In-Differences Models," NBER Technical Working Papers 0280, National Bureau of Economic Research, Inc.
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  21. Sergio Firpo, 2007. "Efficient Semiparametric Estimation of Quantile Treatment Effects," Econometrica, Econometric Society, vol. 75(1), pages 259-276, 01.
  22. Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2008. "How far can reduced childcare prices push female labour supply?," Labour Economics, Elsevier, vol. 15(4), pages 647-659, August.
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  24. Elizabeth U. Cascio, 2009. "Maternal Labor Supply and the Introduction of Kindergartens into American Public Schools," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
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