Income And Stable Center-based Child Care: Evidence From The Earned Income Tax Credit

• In Event: 4167 - Section on Children and Youth Roundtables (1 hour)
  In Refereed Roundtable 60min: Children & Youth Roundtable 4: Social Policy

Abstract

Research clearly shows that early childhood poverty is a strong predictor of academic achievement and lasting adversity through later life. Early child care settings, such as stable center-based care, can serve to mitigate early life disadvantage, yet stable center-based care is often out of reach for low-income families. A key policy question lacking in the current literature is whether small incremental changes in the incomes of working poor families would result in more stable center-based care. Using an instrumental variables strategy with longitudinal survey data (n = 1,600), I leverage state variation in access to the Earned Income Tax Credit (EITC) to predict the extent to which change in family income affects child care type and stability. Results indicate that parents who experience an increase in family income through EITC transfers are more likely to choose formal center-based care over more informal arrangements. Given prior evidence linking early care type and stability with academic achievement and attainment, findings from this study yield insight into a policy-relevant mechanism through which increased income may decrease academic inequalities among children.

Author

• Christina Nefeli Caramanis, University of Texas at Austin