Working Paper: NBER ID: w18086
Authors: Sandra E. Black; Paul J. Devereux; Katrine V. Løken; Kjell G. Salvanes
Abstract: Given the wide use of childcare subsidies across countries, it is surprising how little we know about the effect of these subsidies on children's longer run outcomes. Using a sharp discontinuity in the price of childcare in Norway, we are able to isolate the effects of childcare subsidies on both parental and student outcomes. We find very small and statistically insignificant effects of childcare subsidies on childcare utilization and parental labor force participation. Despite this, we find significant positive effect of the subsidies on children's academic performance in junior high school, suggesting the positive shock to disposable income provided by the subsidies may be helping to improve children's scholastic aptitude.
Keywords: child care subsidies; student performance; disposable income
JEL Codes: J13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Being eligible for lower childcare prices at age 5 (J13) | Children's academic performance in junior high school (I21) |
| Childcare subsidies (J13) | Disposable income increase (D31) |
| Disposable income increase (D31) | Children's academic performance in junior high school (I21) |
| Childcare subsidies (J13) | Parental labor force participation (J22) |
| Childcare subsidies (J13) | Childcare utilization (J13) |
| Childcare subsidies (J13) | Older siblings' benefits (J13) |
| Being eligible for lower childcare prices at age 5 (J13) | Disposable income increase (D31) |