Child Care Markets, Parental Labor Supply, and Child Development

46 Pages Posted: 28 Jan 2020

See all articles by Samuel Berlinski

Samuel Berlinski

Inter-American Development Bank

Maria Marta Ferreyra

World Bank

Luca Flabbi

University of North Carolina (UNC) at Chapel Hill

Juan David Martin

World Bank

Abstract

We develop and estimate a model of child care markets that endogenizes both demand and supply. On the demand side, families with a child make consumption, labor supply, and child-care decisions within a static, unitary household model. On the supply side, child care providers make entry, price, and quality decisions under monopolistic competition. Child development is a function of the time spent with each parent and at the child care center; these inputs vary in their impact.We estimate the structural parameters of the model using the 2003 Early Childhood Longitudinal Study, which contains information on parental employment and wages, child care choices, child development, and center quality. We use our estimates to evaluate the impact of several policies, including vouchers, cash transfers, quality regulations, and public provision. Among these, a combination of quality regulation and vouchers for working families leads to the greatest gains in average child development and to a large expansion in child care use and female labor supply, all at a relatively low fiscal cost.

Keywords: child care markets, child care quality, early childhood development, female labor supply

JEL Classification: J13, J22, L1

Suggested Citation

Berlinski, Samuel and Ferreyra, Maria Marta and Flabbi, Luca and Martin, Juan David, Child Care Markets, Parental Labor Supply, and Child Development. IZA Discussion Paper No. 12904, Available at SSRN: https://ssrn.com/abstract=3525232 or http://dx.doi.org/10.2139/ssrn.3525232

Samuel Berlinski (Contact Author)

Inter-American Development Bank

1300 New York Ave NW
Washington, DC 20577
United States

Maria Marta Ferreyra

World Bank ( email )

1818 H Street, NW
Washington, DC 20433
United States

Luca Flabbi

University of North Carolina (UNC) at Chapel Hill ( email )

102 Ridge Road
Chapel Hill, NC NC 27514
United States

Juan David Martin

World Bank

1818 H Street, NW
Washington, DC 20433
United States

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
149
Abstract Views
629
Rank
354,722
PlumX Metrics