Frauke H. Peter
Day care attendance is an early investment in children¿s human capital accumulation. Yet studies examining the effect of day care participation on later outcomes such as secondary schooling or non-cognitive skills identify mixed results. In the economic literature day care attendance has positive and negative effects on educational outcomes. These contradictive results might be due to unobserved heterogeneity of day care centres. So far day care quality has been hardly ever examined in the economic literature. But since day care facilities vary in terms of structural quality, e.g., child-staff-ratio or education of day care teachers, day care quality might distort the association between day care attendance and child outcomes. Combining data from the German Socio-Economic Panel Study (SOEP) and regional data on day care quality from the ¿Kinder- und Jugendhilfestatistik¿, the paper investigates differences in children's outcomes between age three and six. Using conditionaldifference-in-differences matching potential effects of day care (quality) on changes in children¿s health and personality characteristics are assessed. Health changes are measured as ear infections or eczema, and differences in personality characteristics depict changes in children¿s ability to concentrate and to comprehend. Results indicate that structural quality explains part of the variation in children's health and personality characteristics.
JEL-Classification: J13
Keywords: day care quality, health, personality, conditional difference-in-differences matching
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