Research

The Effects of Subsidy Policy on Price and Quality of Child Care (Job Market Paper)

The largest federal child care program in the United States gives states $12.4 billion annually to spend on child care subsidies. A subsidy covers the cost of private care up to a maximum subsidy, set by the state. Both the maximum subsidy and the number of subsidized families affect demand. Using novel administrative data from Wisconsin, I also show quasi-experimental evidence that providers change their price and quality in response to changes to the maximum subsidy and the number of subsidized families. Under a fixed budget, states must trade off serving more families against giving larger subsidies to fewer families. Which allocation enrolls more children in higher-quality formal care is unclear. In this paper, I determine the enrollment impacts of a 130% average increase in the maximum subsidy Wisconsin implemented in 2022 relative to using the same budget to enroll more families. To determine the counterfactual number of families subsidized under the smaller maximum subsidy, I estimate a structural model with endogenous price, quality, and number of subsidized families. Relative to subsidizing more families, the larger maximum subsidy pushed more low-income families out of formal care than it moved into public or high-quality private providers.

The Effect of Childcare on Female Labor Supply and Child Development in Low and Middle Income Countries

with Costas Meghir

Child care services can offer an opportunity for women to develop their careers and increase household income. At the same time, it can affect the development of children, depending on the quality of care. We first develop a collective model of the household as a conceptual framework to show how improving the availability of child care can affect mothers’ labor market opportunities and earnings and how it can affect child development. We then review the literature on the effects of child care on the employment and earnings of women and on child development. Child care can increase mothers’ employment. However, limited work opportunities or strict norms against maternal work can keep mothers out of the labor force. When other family members provide care, child care can free these caregivers to work or attend school. When studies measure the impact on child development, the results are mixed and depend on both context and quality of provision.

Family Structure, Family Income, and Race

with Joseph Altonji

For-Profit Colleges and Sources of Undermatching

with Ryan Haygood and Pamela Torola

Maternal Employment and Access to Quality Child Care

Public Preschool, Child Development, and Maternal Labor Outcomes: Experimental Evidence from Kenya

with Costas Meghir and Helen Baker-Henningham