Childcare Use and Its Role in Indigenous Child Development: Evidence from the Longitudinal Study of Indigenous Children in Australia

This paper investigates patterns of childcare use and their influence on the cognitive development of Indigenous children. The influence of childcare on the cognitive outcomes of Indigenous children is less well understood than for non-Indigenous children due to a lack of appropriate data. This paper uses data from the Longitudinal Study of Indigenous Children, a unique panel survey that tracks two cohorts of Indigenous children in Australia. This paper focusses on the younger cohort that has been followed from infancy and includes rich information on their childcare use and cognitive outcomes. We find that, compared to Indigenous children who never participated in childcare, Indigenous children who participated in childcare performed better on a range of cognitive outcomes measured across the preschool years. Using regression and propensity score matching techniques we show that this difference is entirely driven by selection into childcare, with children from more advantaged families being more likely to attend formal childcare than children from less advantaged families. However, results from the matching analysis suggest that relatively disadvantaged children might benefit more from attending childcare, as indicated by the positive potential effects found for those who never attended childcare (i.e. the estimated effects had they participated in childcare).