The Impact of Regulations on the Supply and Quality of Care in Child Care Markets

53 Pages Posted: 3 Apr 2006 Last revised: 23 Aug 2010

See all articles by V. Joseph Hotz

V. Joseph Hotz

Duke University; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

Mo Xiao

University of Arizona - Eller College of Management - Department of Economics

Date Written: December 2005

Abstract

We examine the impact of state child care regulations on the supply and quality of care in child care markets. We exploit panel data on both individual establishments and local markets to control for state, time, and, where possible, establishment-specific fixed effects to mitigate the potential bias due to policy endogeneity. We find that the imposition of regulations reduces the number of center-based child care establishments, especially in lower income markets. However, such regulations increase the quality of services provided, especially in higher income areas. Thus, there are winners and losers from the regulation of child care services.

Suggested Citation

Hotz, V. Joseph and Xiao, Mo, The Impact of Regulations on the Supply and Quality of Care in Child Care Markets (December 2005). NBER Working Paper No. w11873. Available at SSRN: https://ssrn.com/abstract=875724

V. Joseph Hotz (Contact Author)

Duke University ( email )

213 Social Sciences Building
Box 90097
Durham, NC 27708
United States
919-660-1841 (Phone)
919-684-8974 (Fax)

HOME PAGE: http://www.econ.duke.edu/~vjh3

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Mo Xiao

University of Arizona - Eller College of Management - Department of Economics ( email )

McClelland Hall
P.O. Box 210108
Tucson, AZ 85721-0108
United States

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