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Is Universal Child Care Leveling the Playing Field? Evidence from Non-Linear Difference-in-Differences

Author

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  • Havnes, Tarjei

    () (University of Oslo)

  • Mogstad, Magne

    () (University of Chicago)

Abstract

Advocates of a universal child care system offer a two-fold argument: Child care facilitates children's long-run development, and levels the playing field by benefiting in particular disadvantaged children. Therefore, a critical element in evaluating universal child care systems is to measure the impact on child development in a way that allows the effects to vary systematically over the outcome distribution. Using non-linear DD methods, we investigate how the introduction of large-scale, publicly subsidized child care in Norway affected the earnings distribution of exposed children as adults. We find that mean impacts miss a lot: While child care had a small and insignificant mean impact, effects were positive over the bulk of the earnings distribution, and sizable below the median. This is an important observation since previous empirical studies of universal child care have focused on mean impacts. We further demonstrate that the essential features of our empirical findings could not have been revealed using mean impact analysis on typically defined subgroups. This is because the intragroup variation in the child care effects is relatively large compared to the intergroup variation in mean impacts.

Suggested Citation

  • Havnes, Tarjei & Mogstad, Magne, 2010. "Is Universal Child Care Leveling the Playing Field? Evidence from Non-Linear Difference-in-Differences," IZA Discussion Papers 4978, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp4978
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    Cited by:

    1. Brilli, Ylenia & Del Boca, Daniela & Pronzato, Chiara D., 2011. "Exploring the Impacts of Public Childcare on Mothers and Children in Italy: Does Rationing Play a Role?," IZA Discussion Papers 5918, Institute for the Study of Labor (IZA).
    2. Havnes, Tarjei & Mogstad, Magne, 2011. "Money for nothing? Universal child care and maternal employment," Journal of Public Economics, Elsevier, vol. 95(11), pages 1455-1465.
    3. L. Pieroni & L. Salmasi, 2015. "Does Cigarette Smoking Affect Body Weight? Causal Estimates from the Clean Indoor Air Law Discontinuity," Economica, London School of Economics and Political Science, vol. 82(328), pages 671-704, October.
    4. Foureaux Koppensteiner, Martin, 2014. "Automatic grade promotion and student performance: Evidence from Brazil," Journal of Development Economics, Elsevier, vol. 107(C), pages 277-290.
    5. Nina Drange & Tarjei Havnes, 2012. "Kindergarten for all: Long run effects of a universal intervention," Discussion Papers 695, Statistics Norway, Research Department.
    6. Alessandra Casarico & Alessandro Sommacal, 2012. "Labor Income Taxation, Human Capital, and Growth: The Role of Childcare," Scandinavian Journal of Economics, Wiley Blackwell, vol. 114(4), pages 1182-1207, December.
    7. Alessandra Casarico & Luca Micheletto & Alessandro Sommacal, 2015. "Intergenerational transmission of skills during childhood and optimal public policy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(2), pages 353-372, April.
    8. Ylenia Brilli & Daniela Del Boca & Chiara Monfardini, 2013. "Child Care Arrangements: Determinants and Consequences," CHILD Working Papers Series 18, Centre for Household, Income, Labour and Demographic Economics (CHILD) - CCA.
    9. Ylenia Brilli & Daniela Boca & Chiara Pronzato, 2016. "Does child care availability play a role in maternal employment and children’s development? Evidence from Italy," Review of Economics of the Household, Springer, vol. 14(1), pages 27-51, March.
    10. Taryn W. Morrissey, 2017. "Child care and parent labor force participation: a review of the research literature," Review of Economics of the Household, Springer, vol. 15(1), pages 1-24, March.
    11. Battistin, Erich & Meroni, Elena Claudia, 2016. "Should we increase instruction time in low achieving schools? Evidence from Southern Italy," Economics of Education Review, Elsevier, vol. 55(C), pages 39-56.
    12. Christian N. Brinch & Erik Hernæs & Zhiyang Jia, 2012. "Labor supply on the eve of retirement. Disparate effects of immediate and postponed rewards to working," Discussion Papers 698, Statistics Norway, Research Department.
    13. Esping-Andersen, Gosta & Garfinkel, Irwin & Han, Wen-Jui & Magnuson, Katherine & Wagner, Sander & Waldfogel, Jane, 2012. "Child care and school performance in Denmark and the United States," Children and Youth Services Review, Elsevier, vol. 34(3), pages 576-589.
    14. repec:esx:essedp:726 is not listed on IDEAS

    More about this item

    Keywords

    universal child care; child development; distributional effects; non-linear difference-in-differences; heterogeneity;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • H40 - Public Economics - - Publicly Provided Goods - - - General
    • I28 - Health, Education, and Welfare - - Education - - - Government Policy
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution

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