Child Care Subsidies and Child Development

48 Pages Posted: 25 Nov 2008

See all articles by Chris M. Herbst

Chris M. Herbst

Arizona State University (ASU) - School of Public Affairs

Erdal Tekin

Georgia State University - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

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Abstract

Child care subsidies are an important part of federal and state efforts to move welfare recipients into employment. One of the criticisms of the current subsidy system, however, is that it overemphasizes work and does little to encourage parents to purchase high-quality child care. Consequently, there are reasons to be concerned about the implications of child care subsidies for child development. In this paper, we provide a systematic assessment of the impact of subsidy receipt on a wide range of child outcomes. Drawing on rich data from the Early Childhood Longitudinal Study, we document a negative relationship between child care subsidies and child development. In particular, our results suggest that subsidy receipt in the year before kindergarten lowers reading and math test scores and increases a variety of behavior problems at kindergarten entry. Some of these negative effects persist to the end of kindergarten. A tentative explanation for the poorer outcomes is that subsidized children are more likely to receive intense exposure to low-quality child care.

Keywords: child care, subsidy, child development

JEL Classification: I18, I2, J13

Suggested Citation

Herbst, Chris M. and Tekin, Erdal, Child Care Subsidies and Child Development. IZA Discussion Paper No. 3836, Available at SSRN: https://ssrn.com/abstract=1305820 or http://dx.doi.org/10.1111/j.0042-7092.2007.00700.x

Chris M. Herbst (Contact Author)

Arizona State University (ASU) - School of Public Affairs ( email )

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United States

Erdal Tekin

Georgia State University - Department of Economics ( email )

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