The Effect of Early Universal Daycare on Child Weight Problems

As the number of young children in daycare increases, people start to worry about the effect of early non-parental care. This is of special relevance as investments in the early periods of life are shown to be most important for a child's long term development. Based on the German national health survey for children, we study the impact of daycare in pre-kindergarten-age on weight problems and gross motor skills of children aged five to nine. This dataset has the advantage to provide objective child development measures. Our results are thus not prone to reporting bias. We estimate the effect of early daycare based on a non-linear instrumental variable strategy, by exploiting regional differences in subsidized centerbased care for zero to three year old children as the source of exogenous variation. Our OLS estimates reveal only very weak differences and do not hint at an increase in weight problems due to early use of daycare. The estimated local average treatment effects even indicate that early daycare leads to more desirable physical development for children 'at the margin'. Further analyses suggest that we do not estimate an effect for the most advantaged children, as the caring decision in families with low and medium income and with an overweight father seem to react most strongly to differences in daycare supply.