The effect of child care subsidies on mothers' labor market outcomes

• In Event: Work and stability in the Safety Net

Abstract

This study provides new estimates of the effect of subsidized child care on the labor market outcomes of mothers in the first five years after they applied for care. Using linked administrative data from Allegheny County, Pennsylvania, I compare approximately 6,500 subsidy applicants who were found eligible between 2019 and 2024 with 1,000 applicants who were found ineligible over the same time period. Applicants are eligible if all adult family members are employed and their household income falls below 200% of the federal poverty level. My available data does not allow for a regression discontinuity design because I measure household earnings using unemployment insurance records, which capture a different concept of income than what is used to determine the applicant’s eligibility. Instead, my benchmark approach is a difference-in-differences comparison of the pre-to-post-application change in earnings between the accepted and rejected applicants. I test robustness using a variety of panel model specifications, as well as cross-sectional models that flexibly control for the mother’s earnings history and for other fixed and time-varying characteristics.

Author

• Seth Adam Chizeck, Carnegie Mellon University
  Presenting Author