The Equilibrium Effects of State-Mandated Minimum Staff-to-Child Ratios

Martín García-Vázquez ()
Additional contact information
Martín García-Vázquez: Washington University in St. Louis

No 2024-025, Working Papers from Human Capital and Economic Opportunity Working Group

Abstract: Mandatory minimum staff-to-child ratios are a pervasive childcare market regulation in the US, and yet little is known about their effects on children's skills. This paper builds an equilibrium model of the childcare market and uses it to simulate the distribution of children’s skills at preschool entry under various mandatory minimum staff-to-child ratios. The model allows for rich family heterogeneity, an endogenous distribution of childcare quality at each age, and endogenous wages that clear the market for teachers and childcare workers. I prove identification and estimate the model using both individual-level and state-level data. Counterfactual simulations show that increasing the stringency of minimum mandatory staff-to-child ratios increases the wages of childcare workers by up to 4.33% and wages of lead teachers by up to 2.75%. Despite making paid childcare more expensive, more stringent regulations increase the level of skills at kindergarten entry for each percentile of the skill distribution, except for the lowest percentiles. The effects on the skill distribution are more pronounced for children born to single mothers than those born to two-parent families. Finally, these overall effects on the skill distribution mask large heterogeneity: Increases in ratios' stringency translate into big skill gains for some children and large drops for others. Both family characteristics and the equilibrium adjustment of teacher's wages are key in determining the children who gain and lose.

Keywords: childcare; skill development; simulation; skill distribution (search for similar items in EconPapers)
JEL-codes: C62 D58 I21 J13 (search for similar items in EconPapers)
Date: 2025-01
New Economics Papers: this item is included in nep-lab
Note: M
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://humcap.uchicago.edu/RePEc/hka/wpaper/Garcia ... m-staff-to-child.pdf First version, October 7, 2024 (application/pdf)

Related works:
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:hka:wpaper:2024-025

Access Statistics for this paper

More papers in Working Papers from Human Capital and Economic Opportunity Working Group Contact information at EDIRC.
Bibliographic data for series maintained by Jennifer Pachon ().