Seminar: Cutting from the future? Impact of a subsidy reduction on child care quality in the Netherlands

Time: 13.00-14.00 hours
Location: CPB-office, Van Stolkweg 14, The Hague

Presentation: Emre Akgunduz (UU/CPB)

Discussant: Suzanne Heijnen (CPB)

Language: English

Registration: Please register by sending an email to seminars@cpb.nl.

Abstract subject:
This paper studies the relationship between child care subsidies and the quality of formal child care. Exploiting the different types of child care funding in the Netherlands, we estimate the effects of a 2012 subsidy reduction on the quality of child care centers. The subsidy cuts were for private centers while municipality funded centers remained unaffected and are used as the control group in our difference-in-differences model. The quality measurements are from a panel survey in which centers' quality were evaluated through classroom assessments by trained observers. The main results show that the subsidy reduction had a modest negative effect on centers' quality. In order to test the robustness of the results and estimate quantile effects, we employ synthetic control and non-linear difference-in-differences estimators. The effects are robust to various specifications and appear to be driven by the decline in the middle of the quality distribution. We conclude that adjustments in subsidies not only affect access and affordability, but may also influence quality in child care markets.

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