Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)
Care or Cash? The Effect of Child Care Subsidies on Student Performance.
(), Paul J. Devereux
(), Katrine V. Løken
() and 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.
Keywords: Childcare; subsidies; academic performance; (follow links to similar papers)
JEL-Codes: H52; J13; (follow links to similar papers)
52 pages, May 16, 2012
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