NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

Child Care Regulations Yield Mixed Results

"African-American children are more likely to leave the regulated sector in response to child care regulation that increases costs, suggesting that they are more likely to be 'losers' while white children are more likely to be 'winners.'"

Government regulation of child care facilities creates both winners and losers in terms of childhood accidents, according to a study by NBER Research Associate Janet Currie and her co-author V. Joseph Hotz. Working parents who can afford to put their children into regulated child care settings benefit from a lower rate of accidental injury or death for their offspring. Parents who find that regulated child care with its higher costs is unaffordable and place their children with unregulated caregivers may subject their children to higher rates of unintentional injury, they find.

In Accidents Will Happen? Unintentional Injury, Maternal Employment, and Child Care Policy (NBER Working Paper No. 8090), Currie and Hotz note that day care has become important in most western countries because of the dramatic increase in recent years in the labor force participation of mothers with young children. In the United States, the proportion of mothers who are working for pay and have children under age six has risen from 47 percent in 1980 to 62 percent in 1996. Despite the magnitude of this change, little is known about the way that the effects of maternal employment may be mediated by child care policy.

Currie and Hotz look at one impact on children, the incidence of unintentional injuries. Epidemiological evidence clearly indicates that the risks of childhood injury vary across socioeconomic groups, race, and time. For example, black children are 1.7 times more likely than white children to die from unintentional injuries. Furthermore, there is evidence that suggests that the quality of supervision matters. For example, most childhood accidents occur between May and August, and most unintentional-injury-related deaths among older children happen in the evening when they are likely to be out of school and unsupervised. Childhood death rates from causes such as burns, drowning, and falls are systematically lower in Europe than in the United States. If supervision matters, they argue, then there may be scope for child care regulation to reduce accident rates.

Currie and Hotz examine this issue using individual data from the National Longitudinal Survey of Youth about accidents requiring medical attention, and state-level data from Vital Statistics records about fatal accidents. The regulations they focus on include child-staff ratios in day care facilities and family homes, whether insurance is required, whether more than one annual inspection is required, and whether caregivers are required to have any training beyond high school.

The authors find "strong and consistent evidence" that requiring caregivers to have education beyond high school reduces both fatal and non-fatal accident rates. Regulations setting child-staff ratios have only small effects on accident rates, the authors find. Requiring more than one inspection per year has statistically significant but mixed effects: It reduces fatal accidents (among children in regulated care), but also crowds black children out of the regulated sector, presumably by raising its price. When insurance is required, the incidence of fatal injuries is lowered among whites, but not among blacks. Both whites and blacks tend to be crowded out of regulated care, however.

On the whole, it appears that African-American children are more likely to leave the regulated sector in response to child care regulation that increases costs, suggesting that they are more likely to be "losers" while white children are more likely to be "winners."

-- David R. Francis


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