Centre-based versus home-based childcare
Robert Bauchmüller
#2013-026
Centre-based childcare is seen as a public investment to facilitate
maternal employment. Recent theoretical research proposes that such
investments potentially lead to substantial gains in child development
and thus to high returns for society as a whole. However, the empirical
evidence is still scarce and often contradictory. This study is based on
rich survey data of a large-scale cohort study of children living in the
Netherlands at the beginning of the new millennium. The Netherlands has
made substantial investments in the last two decades to make the market
of centre-based provisions more professional and far-reaching and to
improve children's school readiness. I study the impact of experiencing
centre- rather than home-based childcare on language, cognitive and
non-cognitive development, assessed at the age of 6. To assess whether
very long or intensive childcare spells can be harmful, I account for
possible non-linearity in the correlation between the centre-based
childcare experience and the child outcomes. As sensitivity analyses, I
also apply instrumental variable and structural equation modelling
approaches to try to correct for potential biases in my estimates that
would result, for example, from unobserved heterogeneity of parents and
children. For both ordinary least square estimates as well as the
sensitivity analyses the results do not support the significant
short-term effects of centre-based childcare stated in the literature.
Keywords: centre-based childcare, non/cognitive and language
development, school readiness, non-linear effects, parental choice
JEL: Classification I21, J13, J24