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ECON 426 Chapter Notes -Child Care, Literature Review, Shortage

Economics (Arts)
Course Code
ECON 426
Sonya Laszlo

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Farees Zubair - 260356490
ECON 426 – AS 1
Title: Universal child care, maternal labour supply, and family well-being
Authors: Baker, M., J. Gruber, and K. Milligan
Source: Journal of Political Economy
Date: August 2005
Keywords: Maternal Labour Supply, Child Care
Main hypotheses/questions:
Impact of prices on child care utilization, elasticities
Whether public financing affects quality or quantity of child care
Child care subsidies in relation to labour supply decisions
Net cost of policy?
Effect on child development and family outcomes?
Main results:
“Crowding Out” of informal child care systems
Following introduction of “CPE program”, demand exceeded supply
Quality of publicly financed child care was higher than private alternatives
Higher income families benefited more than low-income families due to $5 policy
Net cost of policy not being met. Taxes earned did not cover subsidies
Negative behavioural consequences for children but positive cognitive effects
Worsening of parental health (depression) and quality of parental relationships
Literature review:
Main literature cited here is on universal child care and maternal employment
(e.g. Anderson, Patricia M. and Phillip B. Levine (2000))
They also look at behavioural and social development scales for children and
parents (e.g. Achenbach (1983))
Frontier: Find whether Quebec child care policy had a positive impact
Data: National Longitudinal Survey of Children and Youth (NLSCY). The authors focus
on married or cohabiting mothers and their children.
More detailed hypotheses/facts/results/comments:
Child care utilization increased more than increase in labour supply
Negative effects of child care could be transitional due to excess demand
Empirical Strategy:
Estimation of difference-in-differences models to compare outcome of the reform
between Quebec and the rest of Canada
Child care use and labour supply regressions enhanced with graphical measures
“Robustness checks” to solidify inferences made
Intention-to-treat effects to capture full impact of program
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