The Effects of Center-Based Care on the Well-Being of Low-Income Children: An Instrumental Variables Analysis Using Experimental Data from Welfare and Employment Programs

Lisa A. Gennetian, Manpower Demonstration Research Corporation (MDRC)
Danielle Crosby, University of Texas at Austin
Aletha Huston, University of Texas at Austin
Chantelle Dowsett, University of Texas at Austin

In this paper, we take advantage of a set of experiments testing different welfare and employment policies to address the role of child care as an influence on children's academic achievement and social behavior as their parents move to increased employment. We address two related questions: a) Does use of center-based care affect children's well-being; and b) Do welfare and employment policies for parents affect children's well-being in part through the type of child care parents use? By leveraging treatment differences in welfare, employment, and child care policies among low-income single parents with young children, we are able to use instrumental variable techniques to estimate the causal effects of child care on children's development. We find that use of any center-based care during the child's preschool years has a positive effect on school achievement in the early grades of elementary school. Effects hold up when controlling for income and employment.