State Regulations and Child Care Choice

While government regulations safeguard the health and well-being of children, they may also increase the costs of child care services, thus affecting parental decisions. This paper investigates the total effects of regulation on parental choice of child care and the indirect effects of regulation through the price, quality, and availability of care. In their analysis of data from the National Child Care Survey 1990, the researchers find strong evidence that state regulations requiring center-based providers to be trained are associated with a lower probability that parents choose a center, while state inspections are associated with more parent choice of center and home care. They end by discussing the policy implications of our findings.

Data used: National Child Care Survey 1990.