Cognitive and Non-Cognitive Effects of Nursery Care in the Medium Run under Unobserved Heterogeneity

Unlike the previous literature which focuses on the short run cognitive effects of attending childcare (3-5 years old), we estimate the medium run cognitive and non-cognitive effects of nursery care (0-2 years old) considering not only observed but also unobserved heterogeneity. We constructed a panel dataset with national coverage from different administrative sources. Our results suggest positive selection for Language, Mathematics, Motivation and Self-Esteem, implying that babies and toddlers who are more likely (for unobserved reasons) to attend nursery care have a higher treatment effect. We also find heterogeneous effects in a way that further expansions of public nursery care centers that successfully attract babies and toddlers with high resistance and not currently enrolled in nursery care may yield low returns. This calls into question childcare policies at very early stages especially when there is poor quality involved.