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Care or cash? : the effect of child care subsidies on student performance

Black, Sandra E.; Devereux, Paul J.; Løken, Katrine Vellesen; Salvanes, Kjell Gunnar
Working paper
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URI
http://hdl.handle.net/11250/163432
Date
2012-05
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  • Discussion papers (SAM) [586]
Abstract
Given the wide use of childcare subsidies across countries, it is surprising how little we

know about the effect of these subsidies on children’s longer run outcomes. Using a

sharp discontinuity in the price of childcare in Norway, we are able to isolate the effects

of childcare subsidies on both parental and student outcomes. We find very small and

statistically insignificant effects of childcare subsidies on childcare utilization and

parental labor force participation. Despite this, we find significant positive effect of the

subsidies on children’s academic performance in junior high school, suggesting the

positive shock to disposable income provided by the subsidies may be helping to improve

children’s scholastic aptitude.
Publisher
Norwegian School of Economics, Department of Economics
Series
Discussion paper;13/2012

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