Working Paper: NBER ID: w14474
Authors: Chris M. Herbst; Erdal Tekin
Abstract: Child care subsidies are an important part of federal and state efforts to move welfare recipients into employment. One of the criticisms of the current subsidy system, however, is that it overemphasizes work and does little to encourage parents to purchase high-quality child care. Consequently, there are reasons to be concerned about the implications of child care subsidies for child development. In this paper, we provide a systematic assessment of the impact of subsidy receipt on a wide range of child outcomes. Drawing on rich data from the Early Childhood Longitudinal Study, we document a negative relationship between child care subsidies and child development. In particular, our results suggest that subsidy receipt in the year before kindergarten lowers reading and math test scores and increases a variety of behavior problems at kindergarten entry. Some of these negative effects persist to the end of kindergarten. A tentative explanation for the poorer outcomes is that subsidized children are more likely to receive intense exposure to low-quality child care.
Keywords: No keywords provided
JEL Codes: I18; I2; J13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Child care subsidy receipt (J13) | Cognitive outcomes (D91) |
| Child care subsidy receipt (J13) | Behavioral outcomes (D91) |
| Child care subsidy receipt (J13) | Low-quality child care environments (I24) |
| Low-quality child care environments (I24) | Cognitive outcomes (D91) |
| Low-quality child care environments (I24) | Behavioral outcomes (D91) |