The Impact of Regulations on the Supply and Quality of Care in Child Care Markets
- (pp. 1775-1805)
(Complimentary)
Abstract
We examine the impact of state child care regulations on the supply and quality of care in child care markets. We exploit panel data on both individual establishments and local markets to control for state, time, and, where possible, establishment-specific fixed effects to mitigate the potential bias due to policy endogeneity. We find that the imposition of regulations reduces the number of center-based child care establishments, especially in lower income markets. However, such regulations increase the quality of services provided, especially in higher income areas. Thus, there are winners and losers from the regulation of child care services. (JEL H75, J13, L51, L84)Citation
Hotz, V. Joseph, and Mo Xiao. 2011. "The Impact of Regulations on the Supply and Quality of Care in Child Care Markets." American Economic Review, 101 (5): 1775-1805. DOI: 10.1257/aer.101.5.1775Additional Materials
JEL Classification
- H75 State and Local Government: Health; Education; Welfare; Public Pensions
- J13 Fertility; Family Planning; Child Care; Children; Youth
- L51 Economics of Regulation
- L84 Personal, Professional, and Business Services