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

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  • Sandra E. Black
  • Paul J. Devereux
  • Katrine V. Løken
  • Kjell G. Salvanes

Abstract

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.

Suggested Citation

  • Sandra E. Black & Paul J. Devereux & Katrine V. Løken & Kjell G. Salvanes, 2012. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," NBER Working Papers 18086, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:18086
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    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Care or Cash? The Effect of Child Care Subsidies on Student Performance
      by maximorossi in NEP-LTV blog on 2012-06-04 18:57:29

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    Cited by:

    1. Felfe, Christina & Lalive, Rafael, 2012. "Early Child Care and Child Development: For Whom it Works and Why," IZA Discussion Papers 7100, Institute for the Study of Labor (IZA).
    2. Christian Raschke, 2016. "The Impact of the German Child Benefit on Household Expenditures and Consumption," German Economic Review, Verein für Socialpolitik, vol. 17(4), pages 438-477, November.
    3. Douglas Almond & Janet Currie & Valentina Duque, 2017. "Childhood Circumstances and Adult Outcomes: Act II," NBER Working Papers 23017, National Bureau of Economic Research, Inc.
    4. Figlio, D. & Karbownik, K. & Salvanes, K.G., 2016. "Education Research and Administrative Data," Handbook of the Economics of Education, Elsevier.
    5. Havnes, Tarjei & Mogstad, Magne, 2015. "Is universal child care leveling the playing field?," Journal of Public Economics, Elsevier, vol. 127(C), pages 100-114.
    6. Siflinger, Bettina & van den Berg, Gerard, 2016. "The Effects of a Universal Child Care Reform on Child Health – Evidence from Sweden," Annual Conference 2016 (Augsburg): Demographic Change 145765, Verein für Socialpolitik / German Economic Association.
    7. Anna Busse & Christina Gathmann, 2018. "Free Daycare and Its Effects on Children and Their Families," SOEPpapers on Multidisciplinary Panel Data Research 958, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Herbst, Chris M., 2013. "Universal Child Care, Maternal Employment, and Children's Long-Run Outcomes: Evidence from the U.S. Lanham Act of 1940," IZA Discussion Papers 7846, Institute for the Study of Labor (IZA).
    9. Kerris Cooper & Kitty Stewart, 2017. "Does Money Affect Children’s Outcomes? An update," CASE Papers /203, Centre for Analysis of Social Exclusion, LSE.
    10. Christina Felfe & Natalia Nollenberger & Núria Rodríguez-Planas, 2015. "Can’t buy mommy’s love? Universal childcare and children’s long-term cognitive development," Journal of Population Economics, Springer;European Society for Population Economics, vol. 28(2), pages 393-422, April.
    11. Drange, Nina & Telle, Kjetil, 2015. "Promoting integration of immigrants: Effects of free child care on child enrollment and parental employment," Labour Economics, Elsevier, vol. 34(C), pages 26-38.
    12. Daniela Vuri, 2016. "Do childcare policies increase maternal employment?," IZA World of Labor, Institute for the Study of Labor (IZA), pages 241-241, March.
    13. Sebastian Martinez & Pablo Celhay & Cecilia Vidal & Julia Johannsen, 2017. "Paying Patients for Prenatal Care: The Effect of a Small Cash Transfer on Stillbirths and Survival," IDB Publications (Working Papers) 8475, Inter-American Development Bank.
    14. Inés Hardoy & Pål Schøne, 2015. "Enticing even higher female labor supply: the impact of cheaper day care," Review of Economics of the Household, Springer, vol. 13(4), pages 815-836, December.
    15. Kertesi, Gábor & Kézdi, Gábor, 2012. "A roma és nem roma tanulók teszteredményei közti különbségekről és e különbségek okairól
      [The Roma/non-Roma test-score gap in Hungarian education]
      ," Közgazdasági Szemle (Economic Review - monthly of the Hungarian Academy of Sciences), Közgazdasági Szemle Alapítvány (Economic Review Foundation), vol. 0(7), pages 798-853.
    16. Lars-Erik Borge & Jørn Rattsø, 2017. "Local Economic Consequences of Investment in Children: Capitalization of Child Care Services," CESifo Working Paper Series 6809, CESifo Group Munich.
    17. Datta Gupta, Nabanita & Simonsen, Marianne, 2016. "Academic performance and type of early childhood care," Economics of Education Review, Elsevier, vol. 53(C), pages 217-229.
    18. Andersland, Leroy & Nilsen, Øivind A., 2016. "Households’ responses to price changes of formal childcare," Discussion Paper Series in Economics 20/2016, Norwegian School of Economics, Department of Economics.
    19. Drange, Nina & Havnes, Tarjei & Sandsør, Astrid M.J., 2016. "Kindergarten for all: Long run effects of a universal intervention," Economics of Education Review, Elsevier, vol. 53(C), pages 164-181.

    More about this item

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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