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Care or Cash? The Effect of Child Care Subsidies on Student Performance

  • Black, Sandra

    ()

    (University of Texas, Austin)

  • Devereux, Paul J.

    ()

    (University College Dublin)

  • Løken, Katrine V.

    ()

    (University of Bergen)

  • Salvanes, Kjell G.

    ()

    (Dept. of Economics, Norwegian School of Economics and Business Administration)

Given the wide use of childcare subsidies across countries, it is surprising how little we know about the effect of these subsidies on children’s longer run outcomes. Using a sharp discontinuity in the price of childcare in Norway, we are able to isolate the effects of childcare subsidies on both parental and student outcomes. We find very small and statistically insignificant effects of childcare subsidies on childcare utilization and parental labor force participation. Despite this, we find significant positive effect of the subsidies on children’s academic performance in junior high school, suggesting the positive shock to disposable income provided by the subsidies may be helping to improve children’s scholastic aptitude.

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File URL: http://www.nhh.no/Admin/Public/DWSDownload.aspx?File=%2fFiles%2fFiler%2finstitutter%2fsam%2fDiscussion+papers%2f2012%2f13.pdf
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Paper provided by Department of Economics, Norwegian School of Economics in its series Discussion Paper Series in Economics with number 13/2012.

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Length: 52 pages
Date of creation: 16 May 2012
Date of revision:
Handle: RePEc:hhs:nhheco:2012_013
Contact details of provider: Postal: NHH, Department of Economics, Helleveien 30, N-5045 Bergen, Norway
Phone: +47 55 959 277
Fax: 5595 9100
Web page: http://www.nhh.no/sam/Email:


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