The Rug Rat Race

64 Pages Posted: 25 Aug 2009 Last revised: 7 Apr 2022

See all articles by Garey Ramey

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics

Valerie A. Ramey

University of California at San Diego; National Bureau of Economic Research (NBER)

Date Written: August 2009

Abstract

After three decades of decline, the amount of time spent by parents on childcare in the U.S. began to rise dramatically in the mid-1990s. Moreover, the rise in childcare time was particularly pronounced among college-educated parents. Why would highly educated parents increase the amount of time they allocate to childcare at the same time that their own market returns have skyrocketed? After finding no empirical support for standard explanations, such as selection or income effects, we offer a new explanation. We argue that increased competition for college admissions may be an important source of these trends. The number of college-bound students has surged in recent years, coincident with the rise in time spent on childcare. The resulting "cohort crowding" has led parents to compete more aggressively for college slots by spending increasing amounts of time on college preparation. Our theoretical model shows that, since college-educated parents have a comparative advantage in college preparation, rivalry leads them to increase preparation time by a greater amount than less-educated parents. We provide empirical support for our explanation with a comparison of trends between the U.S. and Canada, and a comparison across racial groups in the U.S.

Suggested Citation

Ramey, Garey and Ramey, Valerie A., The Rug Rat Race (August 2009). NBER Working Paper No. w15284, Available at SSRN: https://ssrn.com/abstract=1459585

Garey Ramey

University of California, San Diego (UCSD) - Department of Economics ( email )

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Valerie A. Ramey (Contact Author)

University of California at San Diego ( email )

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National Bureau of Economic Research (NBER)

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