Minimum Quality Regulations and the Demand for Child Care Labor

43 Pages Posted: 7 Sep 2021

See all articles by Umair Ali

Umair Ali

Arizona State University (ASU) - School of Public Affairs

Chris M. Herbst

Arizona State University (ASU) - School of Public Affairs

Christos Makridis

Stanford University; Columbia University - Columbia Business School; Arizona State University (ASU); Department of Veterans Affairs (VA)

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Date Written: August 21, 2021

Abstract

Minimum quality regulations are often justified in the child care market because of the presence of information frictions between parents and providers. However, regulations can also have unintended consequences for the quantity and quality of services provided. In this paper, we merge new data on states' child care regulations for maximum classroom group sizes and child-to-staff ratios with the universe of online job postings to study the impact of regulations on the demand for and characteristics of child care labor. Our identification strategy exploits the unprecedented variation in regulatory reform during the COVID-19 pandemic, relying on changes both within states over time and across children's age groups. We find robust evidence that these regulations reduce the number of child care job postings and encourage providers to substitute away from higher-skilled postings, thereby increasing the number of positions that are out-of-compliance with state law. Furthermore, we show that regulations adversely affect mothers' labor force participation. In sum, the results imply that child care regulations may reduce the demand for child care labor, while simultaneously altering the composition of the workforce.

Keywords: Child Care; Covid-19; Employment; State Regulation; Women

JEL Classification: H75, J21, I28

Suggested Citation

Ali, Umair and Herbst, Chris M. and Makridis, Christos, Minimum Quality Regulations and the Demand for Child Care Labor (August 21, 2021). Available at SSRN: https://ssrn.com/abstract=3909085 or http://dx.doi.org/10.2139/ssrn.3909085

Umair Ali

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

411 N Central Ave
Phoenix, AZ 85004
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Chris M. Herbst

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

Box 870603
Tempe, AZ 85287
United States

Christos Makridis (Contact Author)

Stanford University ( email )

Stanford, CA 94305
United States

Columbia University - Columbia Business School ( email )

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New York, NY 10027
United States

Arizona State University (ASU) ( email )

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Tempe, AZ 85287
United States

Department of Veterans Affairs (VA) ( email )

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Washington, DC 20420
United States

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