Panel Paper:
Experimental Evidence on the Demand for Child Care Quality
Friday, November 9, 2018
Wilson B - Mezz Level (Marriott Wardman Park)
*Names in bold indicate Presenter
It is often argued that parents in the U.S. possess imperfect information about the quality of child care and the positive external benefits to society generated by consuming high-quality care. To support this argument, it is suggested that a large share of parents make their child care arrangements through referrals from friends and relatives or through direct acquaintance with the provider. There is also survey-based evidence indicating that parents value certain attributes of child care that are not correlated with quality, such as convenience and availability, over such features as teacher training and education, which may be better indicators of quality. In this paper, we present evidence from a randomized field experiment designed to provide insights into parental decision-making when hiring a child care provider, and to understand the extent to which trade-offs are made between various caregiver characteristics during a child care search. Specifically, we generate fictitious caregiver profiles (i.e., job-seekers) on a large, national online platform (Care.com), which helps families find short- and long-term child care. We use this website to respond to parent inquiries (i.e., job advertisements) about finding a caregiver. Our caregiver profiles are randomized along a number of dimensions, including the hourly wage rate, number of years of ECE work experience, level of education (i.e., high school, associate’s, or bachelor’s degree), level availability (i.e, during non-standard hours), and convenience (i.e., car ownership). Our experiment responded to parent inquiries in eight large U.S. cities (N=8,000), and we recorded whether a positive or negative response was received by these parents. We also recorded a variety of information about the families seeking child care, including race/ethnicity, number and ages of children, type of care desired, and previous experience with Care.com. Our preliminary results indicate that parents respond strongly and negatively to the desired wage rate, but positively to education and experience. We also uncover interesting variations by family race/ethnicity, with white parents responding more positively to caregiver experience and education and minority parents responding more positively to caregiver accessibility. Finally, we find that parents appear to value caregiver education as long as the wage rate is set at lower levels. For caregivers seeking higher wages, the effect of education is null or negative. Such results provide an initial understanding of the trade-off between price and quality.
