No Child Left Behind: Subsidized Child Care and Children’s Long-Run Outcomes

Many developed countries are currently considering a move toward subsidized, widely accessible child care or preschool. However, studies on how large-scale provision of child care affects child development are scarce, and focused on short-run outcomes. We analyze a large-scale expansion of subsidized child care in Norway, addressing the impact on children’s long-run outcomes. Our precise and robust difference-in-differences estimates show that subsidized child care had strong positive effects on children’s educational attainment and labor market participation, and also reduced welfare dependency. Subsample analyses indicate that girls and children with low-educated mothers benefit the most from child care. (JEL J13, J16)