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The Determinants and Consequences of Child Care Subsidies for Single Mothers

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  • David Blau
  • Erdal Tekin

Abstract

This paper provides an analysis of child care subsidies under welfare reform. Previous studies of child care subsidies use data from the pre-welfare-reform period, and their results may not apply to the very different post-reform environment. We use data from the 1999 National Survey of America's Families to analyze the determinants of receipt of a child care subsidy and the effects of subsidy receipt on employment, school attendance, job search, and welfare participation. We analyze the impact on subsidy receipt of household characteristics such as family size and structure, and past participation in welfare. The most important determinant of receipt of a child care subsidy is past receipt, but we cannot determine from our analysis whether this is a causal effect or a result of unobserved heterogeneity. Ordinary least squares estimates that treat subsidy receipt as exogenous show an effect of subsidy receipt of about 13 percentage points on employment. Two stage least squares estimates that treat subsidy receipt as endogenous and use county dummies as identifying instruments show an effect of 32 percentage points. We present some evidence that is consistent with the assumption that county dummies are valid identifying instruments, and some evidence that is inconsistent with the assumption.

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  • David Blau & Erdal Tekin, 2003. "The Determinants and Consequences of Child Care Subsidies for Single Mothers," NBER Working Papers 9665, National Bureau of Economic Research, Inc.
  • Handle: RePEc:nbr:nberwo:9665
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    Cited by:

    1. Maria Donovan Fitzpatrick, 2010. "Preschoolers Enrolled and Mothers at Work? The Effects of Universal Prekindergarten," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 51-85, January.
    2. Beissinger, Thomas, 2001. "The Impact of Labor Market Reforms on Capital Flows, Wages and Unemployment," IZA Discussion Papers 390, Institute of Labor Economics (IZA).
    3. Blau, David & Currie, Janet, 2006. "Pre-School, Day Care, and After-School Care: Who's Minding the Kids?," Handbook of the Economics of Education, in: Erik Hanushek & F. Welch (ed.), Handbook of the Economics of Education, edition 1, volume 2, chapter 20, pages 1163-1278, Elsevier.
    4. David Blau, 2003. "Child Care Subsidy Programs," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 443-516, National Bureau of Economic Research, Inc.
    5. Peter R. Mueser & Christopher T. King, 2004. "Welfare and Work in the 1990s: Experiences in Six Cities," Working Papers 0409, Department of Economics, University of Missouri, revised 20 Oct 2004.
    6. Kijong Kim & Ipek Ilkkaracan & Tolga Kaya, 2017. "Investing in Social Care Infrastructure and Employment Generation: A Distributional Analysis of the Care Economy in Turkey," Economics Working Paper Archive wp_882, Levy Economics Institute.
    7. Stefan Bauernschuster & Timo Hener & Helmut Rainer, 2014. "Children of a (Policy) Revolution: The Introduction of Universal Child Care and its Effect on Fertility," CESifo Working Paper Series 4776, CESifo.
    8. C. Katharina Spieß, 2011. "Vereinbarkeit von Familie und Beruf – wie wirksam sind deutsche „Care Policies“?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 4-27, May.
    9. Stefan Bauernschuster & Timo Hener & Helmut Rainer, 2016. "Children Of A (Policy) Revolution: The Introduction Of Universal Child Care And Its Effect On Fertility," Journal of the European Economic Association, European Economic Association, vol. 14(4), pages 975-1005, August.
    10. Villena, Mauricio G. & Sanchez, Rafael & Rojas, Eugenio, 2011. "Unintended Consequences of Childcare Regulation in Chile: Evidence from a Regression Discontinuity Design," MPRA Paper 62096, University Library of Munich, Germany, revised 10 Feb 2015.
    11. Robert J. Lemke & Robert Witt & Ann Dryden White, 2007. "The Transition from Welfare to Work," Eastern Economic Journal, Eastern Economic Association, vol. 33(3), pages 359-373, Summer.
    12. Bauernschuster, Stefan & Hener, Timo & Rainer, Helmut, 2013. "Does the Expansion of Public Child Care Increase Birth Rates? Evidence from a Low-Fertility Country," VfS Annual Conference 2013 (Duesseldorf): Competition Policy and Regulation in a Global Economic Order 79909, Verein für Socialpolitik / German Economic Association.
    13. Elizabeth U. Cascio, 2009. "Maternal Labor Supply and the Introduction of Kindergartens into American Public Schools," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
    14. 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.
    15. 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.
    16. Jon D. Wisman & Aaron Pacitti, 2017. "Guaranteed Employment and Universal Child Care For a New Social Contract," Working Papers 2017-05, American University, Department of Economics.
    17. Ashlesha Datar, 2006. "The impact of kindergarten entrance age policies on the childcare needs of families," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 25(1), pages 129-153.
    18. Pablo D. López Zadicoff & Jorge A. Paz, 2003. "El Programa Jefes de Hogar. Eligibilidad, participación y trabajo," CEMA Working Papers: Serie Documentos de Trabajo. 242, Universidad del CEMA.

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    More about this item

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs

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