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Department of Economics, Norwegian School of Economics (NHH) Discussion Paper Series in Economics, Department of Economics, Norwegian School of Economics (NHH)

No 13/2012:
Care or Cash? The Effect of Child Care Subsidies on Student Performance.

Sandra Black (), 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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