Pros and Cons of Child-Care Expansion
What policies optimally promote career advancement for working mothers and at the same time children’s development? According to Christina Felfe, the policy and academic discussion has thus far ignored two key issues: “Who benefits from child care and who does not?” and “How important are regulations in the child-care system?” Answers to these two questions are essential in coping with the major challenges many countries are now facing: 1) expanding child care, which is currently severely rationed, 2) defining regulations that set quality standards to ensure children’s successful development, and 3) determining who should benefit from child-care expansions.
While at CESifo, from 14 to 26 October, Christina Felfe examined the expansion in the German public child-care system, changes in the underlying regulations as well as how the returns to public child-care vary across different subgroups and alternative care.
Ms Felfe’s research focuses on the economics of education, labour economics and applied econometrics. In a recent paper, co-authored with Rafael Lalive, she asks whether attending centre-based child care before age 3 years affects children’s school readiness as well as medium-run language, motor and socio-emotional development. Adopting a marginal treatment effects framework, the authors paid particular attention to the question of which children gain and which children lose from attending early child care instead of being cared for by their mothers. They find clear evidence that the effects of early child care on children’s development differ by observed background characteristics as well as unobserved barriers to entering care. Simulating the effects of expanding the number of slots in early care reveals beneficial effects of a moderate expansion (from current levels to 30%), but neutral or even harmful effects of a further expansion to 70% for the children then entering care.
Christina Felfe is assistant professor at the Swiss Institute for Empirical Economic Research of the University of St. Gallen. She received her PhD in Economics from University Pompeu Fabra, Barcelona, in 2008. She won the Heinz König Young Scholar Award for her paper, “The Willingness to Pay for Job Amenities: Evidence from Mothers’ Return to Work”.