The Impact of Regulations on the Supply and Quality of Care in Child Care Markets

Journal Article

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)

Duke Authors

Cited Authors

  • Hotz, VJ; Xiao, M

Published Date

  • August 2011

Published In

  • American Economic Review

Volume / Issue

  • 101 / 5

Start / End Page

  • 1775 - 1805