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Child Care Markets, Parental Labor Supply, and Child Development

Samuel Berlinski, Maria Marta Ferreyra (), Luca Flabbi and Juan David Martin ()
Additional contact information
Maria Marta Ferreyra: World Bank
Juan David Martin: World Bank

No 12904, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop and estimate a model of child care markets that endogenizes both demand and supply. On the demand side, families with a child make consumption, labor supply, and child-care decisions within a static, unitary household model. On the supply side, child care providers make entry, price, and quality decisions under monopolistic competition. Child development is a function of the time spent with each parent and at the child care center; these inputs vary in their impact. We estimate the structural parameters of the model using the 2003 Early Childhood Longitudinal Study, which contains information on parental employment and wages, child care choices, child development, and center quality. We use our estimates to evaluate the impact of several policies, including vouchers, cash transfers, quality regulations, and public provision. Among these, a combination of quality regulation and vouchers for working families leads to the greatest gains in average child development and to a large expansion in child care use and female labor supply, all at a relatively low fiscal cost.

Keywords: child care markets; child care quality; early childhood development; female labor supply (search for similar items in EconPapers)
JEL-codes: J13 J22 L1 (search for similar items in EconPapers)
Pages: 46 pages
Date: 2020-01
New Economics Papers: this item is included in nep-dem, nep-lam and nep-lma
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Working Paper: Child Care Markets, Parental Labor Supply, and Child Development (2020) Downloads
Working Paper: Child Care Markets, Parental Labor Supply, and Child Development (2020) Downloads
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