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Cost-Effective Public Daycare in a Low-Income Economy Benefits Children and Mothers

Author

Listed:
  • Hojman, Andrés

    (Pontificia Universidad Catolica de Chile)

  • López Bóo, Florencia

    (Inter-American Development Bank)

Abstract

This paper evaluates the impacts of a public program that introduced access to part-time childcare centers for children younger than four years of age in poor urban areas in Nicaragua. We explore the effects of this program on several measures of children's and parental outcomes. Our identification strategy exploits the original randomization and the distance to the centers, using Instrumental Variables (IV) and Marginal Treatment Effects (MTE) methods to tackle imperfect compliance with the original treatment assignments. We present a theoretical model to rationalize our IV assumptions. We find a positive impact of 0.35 standard deviations on the personal-social domain of a widely used development test, and an impact of 14 percentage points on mothers' work participation. Our results are robust to different econometric specifications. We also find suggestive evidence that quality greatly matters for the impacts at the child level, but not at the mother level.

Suggested Citation

  • Hojman, Andrés & López Bóo, Florencia, 2019. "Cost-Effective Public Daycare in a Low-Income Economy Benefits Children and Mothers," IZA Discussion Papers 12585, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp12585
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    More about this item

    Keywords

    RCT; early childhood development; daycare; Latin America; maternal labor force participation; quality;
    All these keywords.

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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