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The Long-Run Impacts of a Universal Childcare Program

By: Michael Baker, Jonathan Gruber, and Kevin Milligan

American Economic Journal: Economic Policy (forthcoming)

Published version

Manuscript version (free)

Commentary by Gabriel Heller-Sahlgren

In the past decades, there has been a surge of interest in early-childhood intervention as a policy tool with which to improve outcomes in the long term. The idea is that early advantages and disadvantages accumulate over time, so investments in early-years education offer higher returns than investments in interventions later in children’s lives. It is therefore understandable why policymakers are attracted by early interventions, as they offer a means by which potential later social problems can be ameliorated or avoided.

Yet there is generally less policy consideration of the flipside of the argument: if successful early-childhood interventions have long-lasting positive effects, we should also expect failed ones to have long-lasting negative effects. Accordingly, early-childhood interventions would have higher risks attached than interventions carried out later. It is thus all the more important that policymakers opt for interventions supported by evidence rather than ideology and intuition.

This paper by Michael Baker and colleagues evaluates the longer-term effects of an early intervention that has become increasingly popular in the past decades: universal childcare. The setting is Quebec, Canada, where policymakers in 1997 introduced regulated childcare places to all children up to four years of age at a price of $5 per day, with the rest of the cost covered by the government. The programme was primarily carried out through non-profit childcare centres and home-based care by regulated providers. Simultaneously, the government introduced qualification requirements for caregivers and expanded voluntary full-time kindergarten and subsidised after-primary school care. The programme has been deemed to be of comparable quality to care provided in other developed countries.

Prior research has found striking negative short-term effects on children’s non-cognitive performance, which has persisted as the programme matured. Some research has also found immediate negative effects on cognitive development. In this paper, the authors investigate whether these negative effects have implications for outcomes later in life, including cognitive performance, criminal behaviour, health, and life satisfaction. By analysing whether the reform affected differences in outcomes between children in Quebec and in other provinces, and showing that there are no similar pre-reform trends in those differences, the authors are able to separate causation from correlation.

The authors first replicate prior findings, showing that the reform had strong positive effects on take-up of childcare, while considerably increasing children’s anxiety and aggression in the immediate term. They also find negative effects on cognitive performance.

 

 

 

 

 

 

 

 

 

 

 

 

 

They then find that these effects persist and, in terms of anxiety, increase substantially when children affected by the reform are between five and nine years old. At this age, there is also a negative impact on hyperactivity. In other words, there is little evidence that the negative effects fade out as children get older.

Indeed, the programme also had clear negative effects on outcomes in adolescence: it decreased self-assessed health and life satisfaction as well as increased crime rates as the children reached adulthood. The findings on longer-term cognitive outcomes are mixed and there is no impact on self-assessed mental health. Yet, overall, the immediate negative effects of the child-care programme appear to have been remarkably persistent, leading to higher criminal activity and lower well-being in the long-term perspective.

Overall, the paper highlights potential negative consequences of early-childhood interventions, which historically have received little attention among policymakers. The argument in favour of these interventions is that they offer higher returns than interventions later in children’s lives – but the flipside of this argument is that the costs of failure are likely to be higher as well. In other words, the potential payoff of early interventions relative to later interventions may be seen as a risk premium. And to minimise the risk involved, it is of utmost importance that policymakers consider rigorous existing evidence and small-scale, randomised pilots before embarking on costly national reforms. Indeed, without precautions, such reforms may very well backfire spectacularly in ways similar to the Quebec childcare programme discussed here.

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Gabriel Heller-Sahlgren is CfEE’s Lead Economist and Editor of its Monthly Research Digest, in the March issue of which this commentary first appeared.

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