The impact of quality rating and improvement systems on families’ child care choices and the supply of child care labor

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Quality Rating and Improvement Systems (QRIS) are increasingly deployed by states to monitor and improve the quality of non-parental child care settings. By making information on program quality accessible to the public, QRIS attempts to alter parental preferences for quality-related attributes and encourage competition between providers. This paper draws on a variety of datasets to empirically characterize the way in which families and providers respond to the enactment of QRIS. Specifically, it exploits the differential timing in states' QRIS roll-out to examine two sets of outcomes: (i) families' child care choices and maternal employment and (ii) the supply and compensation of child care labor. Estimates from difference-in-differences models reveal several noteworthy findings. First, although QRIS induces families to shift from parental to non-parental care, economically disadvantaged families are more likely to use informal care, while their advantaged counterparts are more likely to use formal care. Second, QRIS increases the supply of high-skilled labor, particularly within the center-based sector. Third, all but the most highly-skilled child care workers experience rising compensation levels but also greater turnover. Finally, states that administer a wage compensation program alongside their QRIS experience larger increases in child care supply and compensation as well as lower turnover rates than states operating a QRIS in isolation. Terms of use: Documents in D I S C U S S I O N P A P E R S E R I E S JEL Classification:J13, J21, J22, J24, J3

Information asymmetries between parents and educators in German childcare institutions

“…If these ratings systems raise ECEC costs, this may come at the cost of some children from disadvantaged households who may have to switch to informal care, while their advantaged counterparts are more likely to use ECEC services of higher quality (see e.g. Herbst 2016). Thus, to promote children's wellbeing across socio-economic groups, it would be important to prevent childcare fees for children from disadvantaged families from rising.…”

“…Herbst 2016). Under this scenario, high quality centers will exit the market, average quality will fall, and eventually the market will be filled primarily with mediocre quality centers (Akerlof 1970;Mocan 2007;Artz and Welsch 2014;Herbst 2016). In Germany, as childcare fees are usually fixed (e.g.…”

Information Asymmetries between Parents and Educators in German Childcare Institutions

“…If parents cannot distinguish between high-and low-quality centers, they are less likely to be willing to pay higher fees (e.g. Herbst 2016). Under this scenario, high quality centers will exit the market, average quality will fall, and eventually the market will be filled primarily with mediocre quality centers (Akerlof 1970, Mocan 2007, Artz/Welsh 2014, Herbst 2016.…”

“…Herbst 2016). Under this scenario, high quality centers will exit the market, average quality will fall, and eventually the market will be filled primarily with mediocre quality centers (Akerlof 1970, Mocan 2007, Artz/Welsh 2014, Herbst 2016. In Germany, as childcare fees are usually fixed, the theoretical argument is slightly different: High quality child care is more costly for the providers and requires more effort from staff at a given resource level.…”

“…If these ratings systems increase ECEC costs it could be at the cost of some children from disadvantaged households who may have to switch to informal care, while their advantaged counterparts are more likely to use ECEC services of higher quality (see Herbst 2016). Thus, to promote children's wellbeing across socio-economic groups, it would be important to ensure that childcare fees for children from disadvantaged families would not rise.…”