Working Paper: NBER ID: w26813
Authors: Juan Chaparro; Aaron Sojourner; Matthew J. Wiswall
Abstract: This paper combines multiple sources of information on early childhood development in a unified model for analysis of a wide range of early childhood policy interventions. We develop a model of child care in which households decide both the quantities and qualities of maternal and non-maternal care along with maternal labor supply. The model introduces a novel parenting-effort channel, whereby child care subsidies that permit less parenting may enable better parenting. To estimate the model, we combine observational data with experimental data from the Infant Health and Development Program (IHDP) which randomly assigned free child care when the child was 1 and 2 years old. We estimate a cognitive skill production function and household preferences, giving insight into mechanisms driving the ex post heterogeneous effects of the IHDP intervention, accounting for alternative care substitutes available to the control group and spillovers of the child care offer across the household's decisions. We also estimate ex ante effects of counterfactual policies such as an offer of lower-quality care, requiring a co-pay for subsidized care, raising the maternal wage offer, or a cash transfer. Finally, we use the model to rationalize existing evidence from outside the US on the effects of universal child care programs.
Keywords: Early Childhood Development; Child Care; Cognitive Skill Production; Child Care Subsidies
JEL Codes: J13
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Quality of subsidized care (I24) | Child cognitive skill development (G53) |
| Takeup group composition (Y20) | Impact on child development (J13) |
| Child care subsidies (J13) | Increased maternal care quality (J13) |
| Maternal care hours (J22) | Maternal care quality (J13) |
| Child care subsidies (J13) | Maternal care hours (J22) |
| Maternal care hours (J22) | Child cognitive outcomes (J13) |
| Child care subsidies (J13) | Child development outcomes (J13) |