NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

The Supply of Quality in Child Care Centers

David M. Blau, H. Naci Mocan

NBER Working Paper No. 7225
Issued in July 1999
NBER Program(s):   CH

We use data from a sample of day care centers to estimate the relationships between cost and the quality of the child care service provided, and between revenue and quality. We use a measure of child care quality derived from an instrument designed by developmental psychologists. This measure of quality has been found to be positively associated with child development. Taking the estimated cost-quality and revenue-quality relationships as given, we then estimate the objective functions of the firms and compute the supply function for quality. The results indicate that (1) the estimated cost function is inconsistent with the implications of cost-minimization; (2) for-profit firms operate at a positive level of marginal cost, but non-profit firms operate at zero or negative marginal cost; (3) revenue is positively but weakly associated with quality; and (4) the supply of quality is inelastic, with point estimates of the supply elasticity of .04-.05 for both for-profit and non-profit firms. Implications of the results for child care policy are discussed.

download in pdf format
   (394 K)

email paper

This paper is available as PDF (394 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Published: Published as "The Supply of Quality in Child Care Centers" in the Review of Economics and Statistics; August 2002, 84(3): 483-496.

Users who downloaded this paper also downloaded these:
Blau and Currie w10670 Preschool, Day Care, and Afterschool Care: Who's Minding the Kids?
Blau w7806 Child Care Subsidy Programs
Anderson and Levine w7058 Child Care and Mothers' Employment Decisions
Blau Child Care Subsidy Programs
Mocan w8291 Can Consumers Detect Lemons? Information Asymmetry in the Market for Child Care
 
Publications
Activities
Meetings
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us