Tarjei Havnes

The strong correlation between child care and maternal employment rates has led previous research to conclude that affordable and readily available child care is a driving force both of cross-country differences in maternal employment and of its rapid growth over the last decades. We analyze the introduction of subsidized, universally accessible child care in Norway. Our precise and robust difference-in-differences

There is a heated debate in the US, Canada and many European countries about introducing universally accessible child care. However, studies on universal child care and child development are scarce and only consider short-run outcomes. We analyze the introduction of universal child care in Norway, addressing the impact on children's long-run outcomes. Our precise and robust difference-in-difference estimates show that

ABSTRACT The aim of this paper is to analyse the role of unobserved heterogeneity in structural discrete choice models of labour supply for the evaluation of tax-reforms. Within this framework, unobserved heterogeneity has been estimated either parametrically or nonparametrically through random co- efficient models. Nevertheless, the estimation of such models by means of standard, gradient-based methods is often difficult, in particular if the number of random parameters is high. Given the relative big set of pa- rameters that enter in labour supply models, many researchers have to reduce the role of unobserved heterogeneity by specifying only a small set of random coefficients. However, this simplification affects the estimated labour supply elasticities, which then might hardly change when unob- served heterogeneity is considered in the model. In this paper, we present a new estimation method based on an EM algorithm that allows us to fully consider the effect of unobserved heterogeneity nonparametrically. Results show that labour supply elasticities do change significantly when the full set of coefficients is assumed to be random. Moreover, we analyse the behavioural effects of the introduction of a working-tax credit scheme in the Italian tax-benefit system and show that the magnitude of labour supply reactions and post-reform income distribution do change signifi- cantly when unobserved heterogeneity is fully considered.

ABSTRACT Many developed countries currently consider a move towards a universal child care program. The challenge in assessing the case for universal child care programs is that the evidence base is scarce. We analyze the staged expansion of subsidized, universally accessible child care in Norway. Our approach differs from existing literature which estimate mean impacts of universal child care programs; in contrast, we use non-linear difference-in-differences methods to estimate quantile treatment effects, showing how the child care expansion affected the earnings distribution of exposed children as adults. We complement these estimates with local linear regressions of the child care effects by family income. Our findings suggest that the effects of child care vary systematically across the earnings distribution, that the mean impact misses a lot, and that children of low income parents seem to be the primary beneficiaries of subsidized child care. These findings are important when considering the case for universal child care programs, since the benefits of providing subsidized child care to middle and upper-class children are unlikely to exceed the costs. To help understand the differential effects on earnings, we examine how the child care expansion affected the educational trajectories and cognitive test scores of the exposed children.

ABSTRACT Theory and evidence points towards particularly positive effects of high-quality child care for disadvantaged children. At the same time, disadvantaged families often sort out of existing programs. To counter differences in learning outcomes between children from different socio-economic backgrounds, European governments are pushing for universal child care. However, empirical evidence on the effects of universal programs is scarce. We provide evidence on the effect of mandating kindergarten at age 5–6 on children's school performance at the end of compulsory schooling at age 15–16. Our identifying variation comes from a reform that lowered school starting-age from 7 to 6 in Norway in 1997. Our precise DD estimates reveal hardly any effect, both overall, across the grading distribution and in a large number of subsamples. We also find no impact of the reform when we look at subsets of subjects that may require different types of skills. A battery of specification checks supports our empirical strategy.

ABSTRACT Many developed countries are currently considering a move toward subsidized, widely accessible child care or preschool. However, studies on how large-scale provision of child care affects child development are scarce, and focused on short-run outcomes. We analyze a large-scale expansion of subsidized child care in Norway, addressing the impact on children's long-run outcomes. Our precise and robust difference-in-differences estimates show that subsidized child care had strong positive effects on children's educational attainment and labor market participation, and also reduced welfare dependency. Subsample analyses indicate that girls and children with low-educated mothers benefit the most from child care. (JEL J13, J16)