Centre-based versus home-based childcare

Centrebased childcare is seen as a public investment to facilitate maternalemployment. Recent theoretical research proposes that such investmentspotentially lead to substantial gains in child development and thus to high returnsfor society as a whole. However, the empirical evidence is still scarce and oftencontradictory. This study is based on rich survey data of a largescale cohort studyof children living in the Netherlands at the beginning of the new millennium. TheNetherlands has made substantial investments in the last two decades to make themarket of centrebased provisions more professional and farreaching and toimprove childrens school readiness. I study the impact of experiencing centreratherthan homebased childcare on language, cognitive and noncognitive development, assessed at the age of 6. To assess whether very long or intensive childcare spells can be harmful, I account for possible nonlinearity in the correlation between the centrebased childcare experience and the child outcomes. As sensitivity analyses, I also apply instrumental variable and structural equation modelling approaches to try to correct for potential biases in my estimates that would result, for example, from unobserved heterogeneity of parents and children. For both ordinary least square estimates as well as the sensitivity analyses the results do not support the significant shortterm effects of centrebased childcare stated in the literature.