A study announced in the June Digest of the National Bureau of Economic Research (NBER) takes an in-depth look at Quebec’s system of universal subsidised daycare.  In 1997, the government of Quebec initiated the program under which all parents are eligible to place their child(ren) in daycare for $5 per child per day.  How has the program affected women’s labour force participation, and what has been its impact on children and parents?

The researchers analysed changes in labour force participation using data from the Labour Force Survey (LFS), and changes in child behaviour and family outcomes using data from the National Longitudinal Survey of Children and Youth (NLSCY).  Both surveys are conducted by Statistics Canada.  The Labour Force Survey is done monthly, while the NLSCY has been repeated every two years beginning in 1994.

Because Quebec enacted welfare reform affecting single parents concurrently with the daycare program, the study focused only on two-parent families, both married and co-habitating.

When the program was introduced, a very large increase in the use of daycare occurred, along with a sizeable increase in labour force participation by married women.  Childcare utilisation rose by about one-third, while participation rose by 14.5%.  The difference between the two percentages is almost entirely attributable to the fact that much of the increased use of childcare was diverted from prior informal and family childcare arrangements by mothers who were already in the paid labour force.  For this reason, the increased tax revenue accruing to the province from newly working mothers doesn’t come close to covering the cost of the program.

The authors present evidence that increased use of daycare has had extensive and significant negative impacts on child behaviour and parental anxiety and unhappiness.

The NLSCY gathers a wide range of information on child and parental well-being.  For children, these include health, aggressiveness, hyperactivity, motor and social development, etc.  For parent-child relationships, consistency and effectiveness of parenting and quality of interactions are surveyed.  Parents' mental and physical health is also surveyed.  Quebec’s universal daycare program has resulted in adverse outcomes with respect to virtually all of these measures.

Among children, hyperactivity and aggressiveness increased, while motor and social skills, as well as general health, suffered.

We . . . find consistent and robust evidence of negative effects of the policy change on child outcomes, parenting, and parent outcomes. Child outcomes are worse for a variety of parent-reported measures, such as hyperactivity, inattention, aggressiveness, motor/social skills, child health status, and illness.

Evidence was also found of deterioration in quality and consistency of parenting after initiation of universal daycare.  Hostile and ineffective parenting increased while consistency decreased.  Parental health, especially among fathers, worsened; increased depression among mothers was seen; reported relationship satisfaction went down.

Parental interactions with children are worse along all measured dimensions, and there is some evidence of deterioration in parental health and a reduction in parental relationship quality. These are subjective measures, but the consistency of the results suggests that more access to childcare is bad for these children (and, at least along some dimensions, for these parents).

The possibility cannot be ruled out that these troubling findings represent a short-term adjustment to the daycare program and not an enduring negative impact.  A longer time series of longitudinal data must be gathered before that can be assessed.  In the meantime, universal daycare programs should be viewed with extreme caution until more critical analysis is in hand.

The research was carried out by Michael Baker of University of Toronto, Jonathan Gruber of MIT, and Kevin Milligan of University of British Columbia.  All are affiliated with their respective institution’s Department of Economics.  An extended non-technical summary can be found in the NBER Digest, and the full paper can be downloaded from NBER for US$5 via this page.

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