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Study of universal day care paints mixed picture

Benefits adults, but kids appear to suffer
Jonathan Gruber
Jonathan Gruber

Universal day care, the recurring dream of working parents everywhere, benefits adults economically but may burden young children with health and behavior problems, according to an MIT economist's study of a highly subsidized childcare program in Quebec.

Working with colleagues at two Canadian universities, MIT Professor Jonathan Gruber studied the impact of Quebec's childcare program over a decade, beginning with the provincial government's move in 1997 to subsidize universal day care for 4-year-olds and kindergarten for 5- year-olds. By 2000, the program included infants to 5-year-olds.

In their study, which has been issued as a working paper by the National Bureau of Economic Research, the researchers focused on changes in families' use of day care; the rate of mothers' return or entry into the work force and the effects of day care on children.

"The Quebec Family Policy was a major government innovation. Its 'five-dollar-a-day' plan has given us a rare experimental environment for analyzing the effects of publicly-financed childcare," says Gruber, professor of economics.

Their first finding falls in the "if you build it, they will come" category: The introduction of universal childcare subsidies led to a 14 percent increase in the proportion of 4-year-olds enrolled in government centers. Other age groups' use of the centers increased as well.

The researchers' second finding presented a puzzle economists relish. The number of married women (the study only used data on married women) participating in the labor force increased by almost 8 percent--a sizable increase but no match for the 14 percent increase in 4-year-olds in day care. So what accounts for the shortfall of workers or the big rush of kids?

"The new policy did more than enable some mothers to go to work. It also enabled all families--including those who use daycare for lifestyle reasons--to replace informal arrangements with subsidized care. We found the number of mothers who went to work was not enough to offset the costs of the childcare subsidies," says Gruber. Those costs are still borne by the government.

Other costs are borne by the children themselves, Gruber and his colleagues note in their summary of the effects of the Quebec childcare policy.

Their analysis of the well being of children in daycare, based on data from Canada's National Longitudinal Survey of Children and Youth (NLSCY), produced a dispiriting picture.

The researchers found consistent and robust evidence of negative effects of Quebec's policy on children, parenting and parenting outcomes, they write. Child outcomes include hyperactivity, inattention, aggressiveness and illness, and parental health and relations deteriorated, according to the study of NLSCY data.

Gruber, widely known for his work on health care reform, admits the study suggests that daycare looks bad for children. "But maybe that's the case for very young children. Maybe it reflects tough adjustment to daycare for them. We can't let that brush taint the whole picture," he says.

Gruber conducted the study, "Universal Childcare, Maternal Labor Supply and Family Well-Being," with Michael Baker of the University of Toronto and Kevin Milligan of the University of British Columbia.

A version of this article appeared in MIT Tech Talk on May 7, 2008 (download PDF).

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