EconPapers    
Economics at your fingertips  
 

Is universal child care leveling the playing field?

Tarjei Havnes and Magne Mogstad ()

Journal of Public Economics, 2015, vol. 127, issue C, 100-114

Abstract: We assess the case for universal child care programs in the context of a Norwegian reform which led to a large-scale expansion of subsidized child care. We use non-linear difference-in-differences methods to estimate the quantile treatment effects of the reform. We find that the effects of the child care expansion were positive in the lower and middle parts of the earnings distribution of exposed children as adults, and negative in the uppermost part. We complement this analysis with local linear regressions of the child care effects by family income. We find that most of the gains in earnings associated with the universal child care program relate to children of low income parents, whereas upper-class children actually experience a loss in earnings. In line with the differential effects by family income, we estimate that the universal child care program substantially increased intergenerational income mobility. To interpret the estimated heterogeneity in child care effects, we examine the mediating role of educational attainment and cognitive test scores, and show that our estimates are consistent with a simple model where parents make a tradeoff between current family consumption and investment in children. Taken together, our findings could have important implications for the policy debate over universal child care programs, suggesting that the benefits of providing subsidized child care to middle and upper-class children are unlikely to exceed the costs. Our study also points to the importance of universal child care programs in explaining differences in earnings inequality and income mobility across countries and over time.

Keywords: Universal child care; Child development; Non-linear difference-in-differences; Heterogeneity; Quantile treatment effects; Income mobility (search for similar items in EconPapers)
JEL-codes: D31 H40 I28 J13 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (105) Track citations by RSS feed

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0047272714000899
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Is universal child care leveling the playing field? (2014) Downloads
Working Paper: Is Universal Child Care Leveling the Playing Field? (2012) Downloads
Working Paper: Is Universal Child Care Leveling the Playing Field? (2012) Downloads
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:pubeco:v:127:y:2015:i:c:p:100-114

DOI: 10.1016/j.jpubeco.2014.04.007

Access Statistics for this article

Journal of Public Economics is currently edited by R. Boadway and J. Poterba

More articles in Journal of Public Economics from Elsevier
Bibliographic data for series maintained by Catherine Liu ().

 
Page updated 2022-01-09
Handle: RePEc:eee:pubeco:v:127:y:2015:i:c:p:100-114