Quasi-experimental evidence on the relation between child care subsidies and child care quality

Emre Akgunduz, Egbert Jongen, Paul P.M. Leseman and Janneke Plantenga

No 310, CPB Discussion Paper from CPB Netherlands Bureau for Economic Policy Analysis

Abstract: In this article we present quasi-experimental evidence on the relation between child care subsidies and child care quality. We exploit the difference in funding of private and public centers in the Netherlands. A recent subsidy cut reduced funding for private centers while funding for public centers was unaffected. The quality measurements are from a panel survey in which centers' quality was evaluated through classroom assessments by trained observers. Using differences-in-differences we find that the subsidy reduction caused a statistically significant decrease in quality of one fifth of a standard deviation. We also present results for nonlinear differences-in-differences estimators. The decline in quality is robust across specifications and appears to be driven by a decline in the middle of the distribution. A limitation of our data set is that our pre-reform period is short, so that we can not perform pre-reform placebo tests.

JEL-codes: C21 I21 I28 J13 (search for similar items in EconPapers)
Date: 2015-06
New Economics Papers: this item is included in nep-eur and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:cpb:discus:310

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