Working Paper: NBER ID: w15284
Authors: Garey Ramey; Valerie A. Ramey
Abstract: After three decades of decline, the amount of time spent by parents on childcare in the U.S. began to rise dramatically in the mid-1990s. Moreover, the rise in childcare time was particularly pronounced among college-educated parents. Why would highly educated parents increase the amount of time they allocate to childcare at the same time that their own market returns have skyrocketed? After finding no empirical support for standard explanations, such as selection or income effects, we offer a new explanation. We argue that increased competition for college admissions may be an important source of these trends. The number of college-bound students has surged in recent years, coincident with the rise in time spent on childcare. The resulting "cohort crowding" has led parents to compete more aggressively for college slots by spending increasing amounts of time on college preparation. Our theoretical model shows that, since college-educated parents have a comparative advantage in college preparation, rivalry leads them to increase preparation time by a greater amount than less-educated parents. We provide empirical support for our explanation with a comparison of trends between the U.S. and Canada, and a comparison across racial groups in the U.S.
Keywords: No keywords provided
JEL Codes: J13; J24
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Rise in college-bound cohorts (D29) | Increased competition for college admissions (D29) |
| Increased competition for college admissions (D29) | Increased time spent on college preparation activities (D29) |
| Increased time spent on college preparation activities (D29) | Increased childcare time among college-educated parents (J29) |
| Increased competition for college admissions (D29) | Increased investment in childcare (J13) |
| Increased childcare time among college-educated parents (J29) | Competitive 'rug rat race' among parents (J13) |
| Increased competition for college admissions (D29) | Increased childcare time among college-educated parents (J29) |
| Less intense competition for college slots in Canada (I23) | No increase in childcare time among parents (J22) |