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Gupta -Non-cognitive Child Outcomes and Universal High Quality Child Care

Sep 26, 2015



Exploiting a rich panel data child survey merged with administrative records along with a pseudo-experiment generating variation in the take-u p of preschoo l across municipalities, we provide evidence of
the effects on non-cogn itive child outcomes of participating in large scale publicly provided universal
preschool programs and family day care vis-à-vis home care. We fi nd that, compared to home care, being
enrolled in preschool at age thr ee does not lead to signi fi cant differe nces in child outcomes at age seven no
matter the gender or the mother's level of education. Family day care, on the other hand, seems to
signifi cantly deteriorate outcomes for boys whose mothers have a lower level of education. Finally, longer
hours in non-parental care lead to poorer child outcomes.

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    Journal of Public Economics 94 (2010) 3043

    Contents lists available at ScienceDirect

    Journal of Public Economics

    .e lHigh usage of child care clearly allows parents (or, more precisely,mothers) to participate in the labor market. A natural question to ask,however, is how children are affected by this choice. Child care may beviewed as simply taking care of children, yet an alternative view is thatchild care is, in effect, a type of early childhood investment in thedevelopment of social and academic skills. Depending on the content ofthe care program, one may easily imagine a variety of effects fromenrollment, which may also vary across children. This study focuses on

    care programs such as the Danish or Canadian one. This is despite bothpublic and academic interest, see Currie (2001). Two exceptions are therecent paper by Baker et al. (2008) that investigates the introduction of alarge scale child care program in Canada and a paper by Havnes andMogstad (2009) that examines the impact on adult outcomes of childrenofmarriedmothers of the introductionof universal, subsidized child carein Norway in themid-1970s. Firstly, because universal programs are notlimited to include disadvantaged children, but are offered to the entirethe development of non-cognitive skills such asymptoms, conduct problems, hyperactivity/inrelationship problems, and pro-social behavioto the limited effect of public programs for disaafter early ages. The greatest impacts of these

    Corresponding author.E-mail address: [email protected] (M. Simons

    0047-2727/$ see front matter 2009 Elsevier B.V. Adoi:10.1016/j.jpubeco.2009.10.001ore, we investigate thegiven selection into a

    (2006), Currie (2001), and Ruhm (2004) for excellent surveys. Yet aspointed out by Currie (2001), the literature is rather silent about theeffects of regimeswith universal or large-scale preschool and family dayeffects of hours the treatment intensity specic type of non-parental care.Non-cognitive outcomesPublicly provided universal child carePseudo-experiment

    1. Introduction

    This paper investigates the relatiochild outcomes. Specically, we considenrolment in universal publicly subsidchild care and family day care for thrvis parental care. Center based care, ortype of care for this age group: 63enrolled in this type of care in 1999. Feen preschool care andcts on child outcomes ofigh quality center based-olds in Denmark vis--ool, is themost commonll three-year-olds were

    have been found to have an even larger payoff on the labormarket thancognitive skills (e.g. Heckman et al., (2006)). As our outcome variablewe use the strength and difculties questionnaire index (SDQ); a standardbehavioral measure in the child development literature, see e.g.Goodman (1997). We measure outcomes at age seven.

    There exists a large literatureon child developmentandnon-parentalcare, especially on care for disadvantaged children. See Blau and Curries measures of emotionalattention problems, peerr. Recent research pointsdvantaged children on IQprograms seem to be on

    population, our rchildren acrossSecondly, exactlyis not homogeno


    1 Universal presGeorgia (since 1995program targeted at

    ll rights reserved.e reduction and on fostering integration; skills, whichKeywords:Non-cognitive child outcomes and univer

    Nabanita Datta Gupta a, Marianne Simonsen b,a Aarhus School of Business, Aarhus University, Denmarkb School of Economics and Management, Aarhus University, Denmark

    a b s t r a c ta r t i c l e i n f o

    Article history:Received 14 March 2008Received in revised form 28 September 2009Accepted 2 October 2009Available online 18 October 2009

    JEL classication:H4I2J13J18

    Exploiting a rich panel daexperiment generating varithe effects on non-cognitivpreschool programs and famenrolled in preschool at agematter the gender or thesignicantly deteriorate outhours in non-parental care

    j ourna l homepage: wwwl high quality child care

    child survey merged with administrative records along with a pseudo-n in the take-up of preschool across municipalities, we provide evidence ofhild outcomes of participating in large scale publicly provided universalday care vis--vis home care. We nd that, compared to home care, beingee does not lead to signicant differences in child outcomes at age seven nother's level of education. Family day care, on the other hand, seems toes for boys whose mothers have a lower level of education. Finally, longerto poorer child outcomes.

    2009 Elsevier B.V. All rights reserved.

    sev ie locate / jpubeesults will inform about the effects of modes of care fora range of different socio-economic backgrounds.because the group of children in for example preschoolus, the effects may not be the same had preschool been

    chool is also offered in certain states within the US. Examples are), New York (1997), and Oklahoma (1998). California provides alow-income children. See Blau and Currie (2006).

  • offered to disadvantaged children only. See e.g. Ammermller andPischke (2006) onpeer-effects in primary schools. In otherwords, itmay

    series for children 02 years old,preschools for children 36 years old andafter-school programs for school children, all of which are center based. Inaddition, municipalities organize family day care that takes place inprivate homes for children below the age of 14.5 Themunicipality is freeto decide on the distribution of the different types of care butmust coverlocal needs in terms of number of slots at a given age. Here we focus oncare for three-year-olds: preschool and family day care.

    Day care and preschool programs in Denmark (along with otherNordic countries) are characterized by both high quality expenditure

    3 A fourth wave has been elded in 2007.4 The municipality of Bornholm is excluded from the analysis because it underwent

    a municipality reform during this period.5 In reality, though, children in family day care are much younger than 14, see

    31N. Datta Gupta, M. Simonsen / Journal of Public Economics 94 (2010) 3043be hard to extrapolate from the ndings from the literature ondisadvantaged children to a regime with universal care programs,even for the group of children with adverse family backgrounds.

    Another important contribution of our paper is the evaluation ofeffects of hours in non-parental care. See Blau and Currie (2006) for asurvey of this literature. Some studies focus solely on the effects ofmaternal employment patterns and consider hours (or extent) of work,while others investigate the effects of child care characteristics on childoutcomes and include a measure of hours in care. Common to theseanalyses is that they investigate the effect of hours for the pooled sampleof children.Whether the studies include hours in a linear fashion or a setof dummies, part of the identifying variation will in this way stem fromobservations that are far apart in terms of hours. The estimates mustsubsequently be interpreted as the effect of differences inhours includingall indirect effects stemming from parents' different (labor market)behavior. Instead, we adopt a strategy similar to Behrman et al. (2004);we consider the marginal effects on outcome incurred by increasinghours in a given type of non-parental care by a small amount. Performinglocal comparisons greatly decreases the likelihood of indirect effects andallows us to interpret the resulting estimates as direct effects of changesin hours. Furthermore, the estimator allows for selection into non-parental care to be based on unobservables, but conditional on choosingnon-parental care, the choice between hours must be based onobservables only. The cost is, of course, that we can only speak aboutthe effects of smaller changes in hours relative to a given baseline.

    Estimations are carried out using a longitudinal survey followingchildren born in 1995. The survey holds information about children,mothers, and fathers and is linked to highly reliable administrativeregisters providing us with crucial background information about theparents and their labor market behavior. We use this rich mine ofinformation to estimate our parameters of interest, using OLS.Furthermore, we have access to plausible exogenous variation in thetake-up of preschool via a pseudo-experiment generating waiting listsfor preschool in some municipalities while guaranteeing open slots inothers. See Simonsen (2005) for an evaluation of the effect of a similarpolicy on mother's employment following child birth. Presumablybecause of the difculties in nding valid exogenous variation in thetake-up of child care, only very few studies of the effects of child careon child outcomes employ IV estimation, see e.g. Blau and Grossberg(1992), James-Burdumy (2005), and Bernal and Keane (2008).Furthermore, according to Bernal and Keane (2008), the instrumentsused in the two rst-mentioned studies are extremely weak.

    Our results indicate that being enrolled in non-parental care at agethree is neutral compared to home care. However, if one acknowl-edges that non-parental care is not a well-dened counterfactual, itbecomes clear that the rst result is not very informative.2 We ndthat being enrolled in preschool vis--vis home care does not lead tosignicant differences in non-cognitive child outcomes no matter thegender or the mother's level of education. Family day care relative tohome care, on the other hand, seems to signicantly deteriorateoutcomes for boys whose mothers have a lower level of education. Allestimations suggest that preschool outperforms family day care forthe overall population. However, when subdividing by child genderand mother's education level, we nd that this is largely driven by thegroup of boys born to m