Child Care Subsidies: Who Uses Them and What Do They Buy Low-Income Families and Children?
Johnson, Anna D.;
||This study uses data from the nationally representative Early Childhood Longitudinal Study-Birth Cohort (ECLS-B) to: (1) determine whether eligible recipients of child care subsidies differ from the eligible non-recipients of child care subsidies on child and family characteristics and parental preferences for child care; (2) examine whether subsidy receipt in preschool leads parents to purchase higher-quality child care than they could have afforded without the subsidy; and (3) test whether subsidy receipt in preschool is associated with better school readiness in kindergarten.
Expanding on prior work, this study identifies eligible non-recipients of child care subsidies who resemble subsidy recipients not only on observable demographic characteristics but also on variables that are harder to measure, like parental preferences for specific features of child care. Subsidy recipients are compared to eligible non-recipients on family and child characteristics and parental preference variables. Then, a propensity score matching technique is used to estimate the causal effect of subsidy use in preschool on the quality of preschool care children experience.
Finally, state-fixed effects regressions with a lagged dependent variable are employed to test whether subsidy use in preschool is associated with children’s school readiness in kindergarten. If such an association exists, the possibility that preschool child care quality mediates this link is explored. In all analyses, children who receive subsidies are compared to children who are eligible for subsidies but who instead use either Head Start, or public pre-kindergarten, or unsubsidized care.
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