Québec's Childcare Universal Low Fee Policy 10 Years After: Effects, Costs and Benefits Pierre Lefebvre, Philip Merrigan and Francis Roy-Desrosiers Université du Québec à Montréal
Quebec child care policy • Offering subsidies to providers who agreed to ask a 5$/day fee for a 10 to 11 hour per day service in 1998. • Subsidy offered now to those who agree to a $7 per day fee. Subsidy is around $40 per day. • Number of subsidized spaces gradually increased from around 80,000 to 210,000 as of now
Several studies have studied the impact of the policy with a DD approach comparing Quebec mothers with those in the rest of Canada from 1994 to 2004. • Baker, Gruber, and Milligan (2008), with the NLSCY mothers with 0 to 4 year-olds • (positive effects on Labour supply and negative effects on measures of behaviour and parental outcomes) • Lefebvre and Merrigan (2008) with the SLID mothers with 1 to 5 year olds • (positive effects on labour supply and earnings, possible to correct for trends with these data) • Lefebvre and Merrigan (2009) with the SLID • (“Long-term effects of the policy on labour supply of mothers”) Mothers with 6 to 11 year-olds with no children less than 6. DDD approach.
Several issues remain unanswered • 1. Is the effect different per age group ? • Interesting, in light of the new Ontario Policy. • As the Quebec child care policy was implemented, a policy of full-time kindergarten with before and after school subsidized care replaced a policy of part-time kindergarten. • Also, is there an impact of the EI maternity leave policy change in 2001? • Could impact mothers with newborns. • 2 Are the results persisting to 2007 • 3 Is there an effect on cognition ? • 4 What does the census say about the policy? • 5 What are the government benefits to the policy?
Implementation of the policy and statistics • Sept. 1997 → 4 year-olds • Sept. 1999 → 3 year olds • Sept. 1999 → 2 ans • Sept. 2000 → 0-1 year olds
Regression approach • A non-experimental evaluation framework based on multiple pre- and post-treatment periods is used to estimate the policy effects. The econometric approach is based on a “difference-in-differences” procedure
Data • National Longitudinal Survey of Children and Youth (NLSCY/ELNEJ) • Every two years since 1994-1995 to 2006-2007, 7 available cycles. • Large samples of 0-5 year-olds every cycle permits estimation by age of the child.
Estimated effects • Hours in day care • Labour force Participation • Annual weeks worked • Standardized Score of cognitive development for 4 and 5 year olds Peabody Picture and Vocabulary Test
Regression results • Estimated Effects of the policy, by • year • age of child • mother’s education.
Census Results (master’s essay PY Pratte) • Census presents a rather different picture form the SLID and the NLSCY • Positive trends for women with children 13-17 who have not benefited from the 1997 policy are rather similar to the trends for women with young children
DD and DDD estimates with census3 year old children by education of the mother DD 2001 2006 Education DDD 2001 2006
Conclusions • Labour Supply growth and hours in daycare growth in Quebec continues from 2003 to 2007 for the mothers of young children 1 to 4, but remains stable in the ROC. • The federal EI maternity leave seems to have stopped the growth in Labour supply for mothers with infants • The impact of full-day kindergarten (vs part-day) on labour supply seems weak • There is some evidence that the impact on cognitive scores could be negative • Census DDD results point towards positive effects of the policy for better educated mothers.
Benefits for the government • Simulations using K. Milligan’s (UBC) simulator • Data : Survey on Labour and Income Dynamic (SLID/EDTR), 2004 • Assume that the policy increased the labour force participation rate of mothers with at least one child 1-11 by +10% • Assumed basically the impact was for full-time work. • We retired from the 2004 SLID 55,000 mothers working full-time from the labour market. We started by retiring them from the bottom end of the earnings distribution and worked our way up the distribution. Each time recomputing aggregate taxes and transfers at both federal and provincial levels.
Conclusion • Benefits are small for the provincial government and slightly larger at the federal level, unless policy pushed high earnings women in the labour market, an unlikely scenario. Would be smaller if we included the increase in child care tax credits that would surely occur if the subsidy was removed