Quasi-Structural Estimation of a Model of Child Care Choices and Child Cognitive Production

نویسندگان

  • Raquel Bernal
  • Michael P. Keane
چکیده

This paper evaluates the effects of maternal time inputs and alternative providers’ time inputs on children’s cognitive development using the sample of single mothers in the National Longitudinal Survey of Youth. In order to deal with the selection problem that arises because of unobserved heterogeneity of mothers and children, we develop a model of mother’s employment and child-care decisions. Guided by this model, we obtain approximate decisions rules for employment and child care use, and estimate these jointly with the child’s cognitive ability production function – an approach we refer to as “quasi-structural.” We take advantage of the plausibly exogenous variation in employment and child-care choices generated by the differences in welfare regulations across states and over time introduced by the welfare reform legislation of 1996, and prior to that by Section 1115 Welfare Waivers, to help identify the selection model. These welfare rules provide natural exclusion restrictions, as it is plausible that they enter the decision rules for employment and day care use, while not entering the child cognitive ability production function directly. The instruments are quite powerful, in the sense that they explain a substantial part of the variation in work and day care use by single mothers. Our results imply that if a mother works full-time, while placing a child in day care, for one full year, this reduces the child’s cognitive ability test score by 3.0%, which is 0.135 standard deviations. The result we obtain here is very similar to what we obtained in Bernal and Keane (2005), where we adopted a single equation instrumental variable (IV) approach. There, our estimates implied that one year of full-time work and day care use would lower a child’s test scores by 2.9%. Each approach relies on somewhat different identifying assumptions. Thus, it is comforting that results are so robust across the two approaches. 1 Corresponding author: [email protected]

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تاریخ انتشار 2005