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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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  1. Michael Baker, 2011. "Innis Lecture: Universal early childhood interventions: what is the evidence base?," Canadian Journal of Economics, Canadian Economics Association, vol. 44(4), pages 1069-1105, November.
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  3. Black, Sandra E. & Devereux, Paul J. & Loken, Katrine Vellesen & Salvanes, Kjell G., 2012. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," IZA Discussion Papers 6541, Institute for the Study of Labor (IZA).
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  7. Sergio Firpo, 2007. "Efficient Semiparametric Estimation of Quantile Treatment Effects," Econometrica, Econometric Society, vol. 75(1), pages 259-276, 01.
  8. 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.
  9. Marianne P. Bitler & Jonah B. Gelbach & Hilary W. Hoynes, 2006. "What Mean Impacts Miss: Distributional Effects of Welfare Reform Experiments," American Economic Review, American Economic Association, vol. 96(4), pages 988-1012, September.
  10. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
  11. Abadie, Alberto & Diamond, Alexis & Hainmueller, Jens, 2010. "Synthetic Control Methods for Comparative Case Studies: Estimating the Effect of California’s Tobacco Control Program," Journal of the American Statistical Association, American Statistical Association, vol. 105(490), pages 493-505.
  12. 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).
  13. Heckman, James J & Smith, Jeffrey, 1997. "Making the Most Out of Programme Evaluations and Social Experiments: Accounting for Heterogeneity in Programme Impacts," Review of Economic Studies, Wiley Blackwell, vol. 64(4), pages 487-535, October.
  14. Aaberge, Rolf, 1997. "Interpretation of changes in rank-dependent measures of inequality," Economics Letters, Elsevier, vol. 55(2), pages 215-219, August.
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  16. Michael Baker & Jonathan Gruber & Kevin Milligan, 2008. "Universal Child Care, Maternal Labor Supply, and Family Well-Being," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 709-745, 08.
  17. James J. Heckman & Jora Stixrud & Sergio Urzua, 2006. "The Effects of Cognitive and Noncognitive Abilities on Labor Market Outcomes and Social Behavior," NBER Working Papers 12006, National Bureau of Economic Research, Inc.
  18. Havnes, Tarjei & Mogstad, Magne, 2009. "Money for Nothing? Universal Child Care and Maternal Employment," IZA Discussion Papers 4504, Institute for the Study of Labor (IZA).
  19. Berlinski, Samuel & Galiani, Sebastian & Gertler, Paul, 2009. "The effect of pre-primary education on primary school performance," Journal of Public Economics, Elsevier, vol. 93(1-2), pages 219-234, February.
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  21. Tarjei Havnes & Magne Mogstad, 2011. "No Child Left Behind: Subsidized Child Care and Children's Long-Run Outcomes," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 97-129, May.
  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.
  23. Baker, Michael, 2011. "Universal Early Childhood Interventions: What is the Evidence Base?," CLSSRN working papers clsrn_admin-2011-29, Vancouver School of Economics, revised 28 Nov 2011.
  24. Pierre Lefebvre & Philip Merrigan & Matthieu Verstraete, 2008. "Childcare Policy and Cognitive Outcomes of Children: Results from a Large Scale Quasi-Experiment on Universal Childcare in Canada," Cahiers de recherche 0823, CIRPEE.
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