Reinvestigating Who Benefits and Who Loses from Universal Childcare in Canada

Ongoing interest in childcare issues has been stimulated in part by a trend towards the increasing labour force participation of mothers with young children. The empirical literature evaluating the impact of childcare programs on developmental outcomes appears to reach conflicting results. On the one hand, small scale experimental studies find large benefits for disadvantaged children, whereas studies that look at programs which provide universal coverage do not find evidence of significant benefits. We argue that by examining the impact of the policy on the full distribution of the outcomes and not simply focus on mean impacts may potentially reconcile these findings. More generally, improving our understanding of who truly benefits and who loses from these policies is increasingly important as several countries worldwide are currently considering implementing a variety of universal early childhood education programs.
Specifically, we extend earlier research that utilized parametric methods to recover intent to treat estimates of access to $5 a day childcare by using a nonparametric estimators to identify causal impacts of the program itself at specific percentiles within the distribution. We find that the Quebec Family Policy significantly boost test scores for children who are most disadvantaged and located at the lower quantiles of the distribution. However, students between the 20th and 85th quantile receive significant negative impacts from child-care. As this group is the lion's share of the population, it is not surprising that the mean impacts presented in earlier work are negative in sign. Against traditional notions surrounding the implementation of universal child care, positive effects for children at the highest portion of the distribution are also found. Taken together these results indicate the importance of a distributional analysis in addition to a study of mean effects, provide a more complete picture of how childcare affects subsequent development and illustrate the trade-offs that policymakers will be making if these policies are adopted.