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Care or Cash? The Effect of Child Care Subsidies on Student Performance

Author

Listed:
  • Sandra E. Black
  • Paul J. Devereux
  • Katrine V. Løken
  • Kjell G. Salvanes

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.

Suggested Citation

  • Sandra E. Black & Paul J. Devereux & Katrine V. Løken & Kjell G. Salvanes, 2012. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," NBER Working Papers 18086, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:18086
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    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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