From dawn till dusk: Implications of full-day care for children's development

An important issue on the political agenda of many developed countries is the intensive margin of formal child care and, consequently, the effects of expanding the operating hours of child care institutions. We add to this debate by studying the effects of offering full-day child care on child development. Specifically, we analyze the consequences of a substantial increase of full-day slots at the expense of half-day slots and hence, when holding the extensive margin constant. The conversion was triggered by several reforms to the German child care system. Using unique administrative data covering the full population of eight birth cohorts in one West German state, we find that more hours have a negative effect on children's socio-emotional well-being. Subgroup analysis suggests that this result is driven by children from disadvantaged family backgrounds, especially those from low-education backgrounds, single-parent households and migrant families. On a brighter note, we find that full-day care has a positive effect on the school readiness of immigrant children.