Childcare Policy and Cognitive Outcomes of Children: Results from a Large Scale Quasi-Experiment on Universal Childcare in Canada

Abstract

Effects of a low-fee universal childcare policy, initiated in Quebec, the second most populous province in Canada, on the cognitive development of preschool children are estimated with a sample of 4- and 5-year-olds (N=8,875; N=17,154). In 1997, licensed and regulated providers of childcare services began offering daycare spaces at the reduced fee of $5 per day per child for children aged 4. By 2000, the low-fee policy applied to all children aged 0 to 59 months (not in kindergarten). The study uses 6 cycles of biennial data drawn from Statistics Canada's National Longitudinal Survey of Children and Youth (1994-2004) and quasi-experimental estimation methods to provide evidence that the policy had substantial negative effects on preschool children's Peabody Picture Vocabulary Test scores. The negative effects are found to be stronger for children with mothers who have lower levels of education.

Keywords: Preschool children, school readiness, childcare, kindergarten, treatment effects, natural experiment

JEL Classification: H42, J21, J22