Cost-Effective Public Daycare in a Low-Income Economy Benefits Children and Mothers

50 Pages Posted: 9 Sep 2019

See all articles by Andres Hojman

Andres Hojman

University of Chicago

Florencia López Bóo

Inter-American Development Bank (IDB); Young Lives, Department of International Development, University of Oxford; IZA

Abstract

This paper evaluates the impacts of a public program that introduced access to part-time childcare centers for children younger than four years of age in poor urban areas in Nicaragua. We explore the effects of this program on several measures of children's and parental outcomes. Our identification strategy exploits the original randomization and the distance to the centers, using Instrumental Variables (IV) and Marginal Treatment Effects (MTE) methods to tackle imperfect compliance with the original treatment assignments. We present a theoretical model to rationalize our IV assumptions. We find a positive impact of 0.35 standard deviations on the personal-social domain of a widely used development test, and an impact of 14 percentage points on mothers' work participation. Our results are robust to different econometric specifications. We also find suggestive evidence that quality greatly matters for the impacts at the child level, but not at the mother level.

Keywords: RCT, early childhood development, daycare, Latin America, maternal labor force participation, quality

JEL Classification: C21, I28, I38

Suggested Citation

Hojman, Andres and López Bóo, Florencia, Cost-Effective Public Daycare in a Low-Income Economy Benefits Children and Mothers. IZA Discussion Paper No. 12585, Available at SSRN: https://ssrn.com/abstract=3449579

Andres Hojman (Contact Author)

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

Florencia López Bóo

Inter-American Development Bank (IDB) ( email )

1300 New York Avenue NW
Washington, DC 20577
United States

Young Lives, Department of International Development, University of Oxford ( email )

Queen Elizabeth House
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Oxford, OX1 3TB
United Kingdom

IZA ( email )

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Bonn, D-53072
Germany

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