Age-specific Effects of Early Daycare on Children's Health

Abstract

Over the past decades, the share of very young children in daycare has increased significantly in many OECD countries, including Germany. Despite the relevance of child health for child development and later life success, the effect of early daycare attendance on health has received little attention in the economic literature. In this study, I investigate the impact of a large daycare expansion in Germany on children’s age-specific mental and physical health outcomes. Based on a unique set of administrative health records covering 90% of the German population over a period of ten years, I exploit exogenous variation in daycare attendance induced by the expansion. My results provide evidence for the substitution of illness spells from the first years of elementary school to the first years of daycare. Specifically, I find that early daycare attendance increases the prevalence of respiratory and infectious diseases and healthcare consumption when entering daycare (1–2 years) by 5–6 percent. At elementary school age (6–10 years), the prevalence decreases by similar magnitudes. I do not find evidence for an effect of daycare attendance on mental disorders, obesity, injuries, vision problems, or healthcare costs. Heterogeneity analysis indicates more pronounced effects for children from disadvantaged areas, earlier detection of vision problems, and a reduction in obesity in these children.

Note:
Funding Declaration: I am grateful to the National Association of Statutory Health Insurance Physicians (Kassen ̈arztliche Bundesvere- inigung, KBV) for data access and for their excellent support. I also thank C. Katharina Spieß, Peter Haan, Clara Sch ̈aper, Laura Schmitz, Elena Ziege, Jan Marcus, Mathias Huebener, Katharina Wrohlich, Virginia Sondergeld, Do- minik Sachs, Jonas Jessen and Hannes Schwandt for helpful comments and fruitful discussions on the topic. Finally, my thanks goes to the participants in the CRC Summer School 2021: Science-Based Policy Advice, Berlin, the BeNA Summer Workshop 2021, Berlin, the LEER Conference on Education Economics 2022, Leuven, the Spring Meeting of Young Economists (SMYE) 2022, Orl ́eans, the Annual meeting of the Society of Economics of the Household (SEHO) 2022, London, the EEA-ESEM (European Economic Association) 2022, Milan, the 1st Berlin Workshop on Empirical Public Economics 2022, Berlin and internal seminars at DIW Berlin.

Conflict of Interests: The author declares that there is no conflict of interest.

Keywords: Child care, daycare expansion, physical health, mental health, education, administrative health records, difference-in-differences, event study

JEL Classification: I10,I12,J13,C23