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Universal Child Care, Maternal Employment, and Children's Long-Run Outcomes: Evidence from the U.S. Lanham Act of 1940

  • Herbst, Chris M.

    ()

    (Arizona State University)

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    This paper provides a comprehensive analysis of the Lanham Act of 1940, a heavily-subsidized and universal child care program that was administered throughout the U.S. during World War II. I begin by estimating the impact of the Lanham Act on maternal employment using 1940 and 1950 Census data in a difference-in-difference-in-differences framework. The evidence suggests that mothers' paid work increased substantially following the introduction of the child care program. I then study the implications of the Lanham Act for children's long-run outcomes related to educational attainment, family formation, and labor market participation. Using Census data from 1970 to 1990, I assess well-being in a lifecycle framework by tracking cohorts of treated individuals throughout their prime working years. Results from difference-in-differences models suggest that the Lanham Act had strong and persistent positive effects on well-being, equivalent to a 0.36 standard deviation increase in a summary index of adult outcomes. In addition, a supplementary analysis of distributional effects shows that the benefits of the Lanham Act accrued largely to the most economically disadvantaged adults. Together, these findings shed light on the design of contemporary child care systems that balance the twin goals of increasing parental employment and enhancing child well-being.

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    File URL: http://ftp.iza.org/dp7846.pdf
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    Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 7846.

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    Length: 63 pages
    Date of creation: Dec 2013
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    Handle: RePEc:iza:izadps:dp7846
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    1. David Blau & Philip Robins, 1991. "Child care demand and labor supply of young mothers over time," Demography, Springer, vol. 28(3), pages 333-351, August.
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    11. Tekin, Erdal, 2005. "Child care subsidy receipt, employment, and child care choices of single mothers," Economics Letters, Elsevier, vol. 89(1), pages 1-6, October.
    12. Herbst, Chris M. & Tekin, Erdal, 2011. "The Geographic Accessibility of Child Care Subsidies and Evidence on the Impact of Subsidy Receipt on Childhood Obesity," IZA Discussion Papers 6025, Institute for the Study of Labor (IZA).
    13. Maria Donovan Fitzpatrick, 2012. "Revising Our Thinking About the Relationship Between Maternal Labor Supply and Preschool," Journal of Human Resources, University of Wisconsin Press, vol. 47(3), pages 583-612.
    14. Rachel Connelly & Jean Kimmel, 2003. "The Effect of Child Care Costs on the Employment and Welfare Recipiency of Single Mothers," Southern Economic Journal, Southern Economic Association, vol. 69(3), pages 498-519, January.
    15. Black, Sandra & Devereux, Paul J. & Løken, Katrine V. & Salvanes, Kjell G., 2012. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," Discussion Paper Series in Economics 13/2012, Department of Economics, Norwegian School of Economics.
    16. Goldin, Claudia D. & Olivetti, Claudia, 2013. "Shocking Labor Supply: A Reassessment of the Role of World War II on Women's Labor Supply," Scholarly Articles 13041327, Harvard University Department of Economics.
    17. Nabanita Datta Gupta & Marianne Simonsen, 2007. "Non-cognitive Child Outcomes and Universal High Quality Child Care," Economics Working Papers 2007-17, School of Economics and Management, University of Aarhus.
    18. Ludwig, Jens & Miller, Douglas L., 2006. "Does Head Start Improve Children's Life Chances? Evidence from a Regression Discontinuity Design," IZA Discussion Papers 2111, Institute for the Study of Labor (IZA).
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    23. David Blau & Erdal Tekin, 2007. "The determinants and consequences of child care subsidies for single mothers in the USA," Journal of Population Economics, Springer, vol. 20(4), pages 719-741, October.
    24. David Deming, 2009. "Early Childhood Intervention and Life-Cycle Skill Development: Evidence from Head Start," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 111-34, July.
    25. 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.
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