Investing in Early Childhood Care and Education MAASTRICHT GRADUATE SCHOOL OF GOVERNANCE Investing in Early Childhood The Maastricht Graduate School of Governance (MGSoG) was founded in Care and Education: September 2004 at Maastricht University. The mission of the School is to train specialists who combine a high level of academic scholarship with leadership, in order to strengthen democratic governance in domestic The Impact of Quality on Inequality and international organizations, by focusing on policy analysis, risk assessment, policy design, monitoring and evaluation, and methodologies and techniques of policy research. MGSoG provides multi-disciplinary top-academic training in the heart of Europe. This is achieved by building on the academic resources of the different faculties at Maastricht University as well as those of several Robert Bauchmüller foreign partners. From 2011 onwards, the School has become part of the United Nations University, strengthening further its international training and research network while building on the expertise of UNU-MERIT the Maastricht based research institute of the UNU. To guarantee both high academic quality and policy relevance, the MGSoG is closely involved with an extensive academic and professional network, including highly recognized organizations such as the OECD, ILO, UNDP, WB, IMF and EU. Robert Bauchmüller www.boekenplan.nl ISBN 978-90-8666-304-0 9 789086 663040 33 Investing in Early Childhood Care and Education: The Impact of Quality on Inequality © 2013 Robert Bauchmüller All rights reserved. No part of this publication may be reproduced, stored in retrieval system, or transmitted in any form, or by any means, electronic, mechanical, photocopying, recording or otherwise, without the prior permission in writing, from the author. ISBN 978 90 8666 304 0 Cover picture by Paola Hagen-Zanker Published by Boekenplan, Maastricht NL Investing in Early Childhood Care and Education: The Impact of Quality on Inequality DISSERTATION To obtain the degree of Doctor at Maastricht University, on the authority of the Rector Magnificus Prof. dr. Luc L.G. Soete in accordance with the decision of the Board of Deans to be defended in public on Thursday May 23, 2013, at 14:00 hours. by Robert Bauchmüller May 2013 Supervisors: Prof. Dr. Chris De Neubourg Prof. Dr. Daniele Checchi, University of Milan, Italy Prof. Dr. Gøsta Esping-Andersen, Universitat Pompeu Fabra, Barcelona, Spain Assessment Committee: Prof. Dr. Lex Borghans (Chairman) Prof. Dr. Nabanita Datta Gupta, University of Aarhus, Denmark Prof. Dr. Jaap Dronkers Dr. Paul Jungbluth Table of Contents TABLE OF CONTENTS ............................................................................................... I PREFACE ....................................................................................................................... V ACKNOWLEDGEMENTS ........................................................................................ VII LIST OF FIGURES ...................................................................................................... IX LIST OF TABLES ......................................................................................................... X CHAPTER I - INTRODUCTION ............................................................................... 11 1. BACKGROUND ......................................................................................................... 11 2. RESEARCH QUESTIONS ............................................................................................ 13 3. CONTRIBUTION OF THE DISSERTATION ................................................................... 16 4. IDENTIFICATION STRATEGIES .................................................................................. 16 5. STRUCTURE OF THE DISSERTATION ......................................................................... 18 5.1. STUDY I/III: CENTRE-BASED VERSUS HOME-BASED CHILDCARE ........................ 18 5.2. STUDY II/III: POTENTIAL GAINS FROM CHILD-CENTRED EARLY CHILDHOOD EDUCATION ..................................................................................................................... 19 5.3. STUDY III/III: LONG-RUN BENEFITS FROM UNIVERSAL HIGH-QUALITY PRESCHOOLING ............................................................................................................... 19 CHAPTER II - CENTRE-BASED VERSUS HOME-BASED CHILDCARE (STUDY I/III) ............................................................................................................................... 21 1. INTRODUCTION ....................................................................................................... 21 2. LITERATURE DISCUSSION ........................................................................................ 23 3. DATA DESCRIPTION ................................................................................................. 27 4. METHODOLOGY ...................................................................................................... 29 4.1. NON-LINEAR LINK BETWEEN CHILDCARE SPELL AND CHILD OUTCOMES.......... 30 4.2. INSTRUMENTAL VARIABLE (IV) APPLICATION ................................................... 34 4.3. STRUCTURAL EQUATIONS MODELLING (SEM) ................................................... 35 5. ESTIMATION RESULTS .............................................................................................. 37 5.1. OLS ESTIMATES ................................................................................................... 38 5.2. IV ESTIMATES ....................................................................................................... 42 5.3. SEM ESTIMATES .................................................................................................. 44 6. CONCLUSIONS ......................................................................................................... 47 APPENDIX II .................................................................................................................... 49 i CHAPTER III - POTENTIAL GAINS FROM CHILD-CENTRED EARLY CHILDHOOD EDUCATION (STUDY II/III) ........................................................... 53 1. INTRODUCTION ....................................................................................................... 53 2. EARLY CHILDHOOD EDUCATION POLICIES IN THE NETHERLANDS ....................... 56 3. LITERATURE DISCUSSION ........................................................................................ 62 4. DATA DESCRIPTION ................................................................................................. 65 5. METHODOLOGY ...................................................................................................... 69 5.1. ACCOUNTING FOR MISSING TREATMENT INFORMATION ................................... 70 5.2. GROUP DIFFERENCES ........................................................................................... 72 5.3. LINEAR REGRESSION ........................................................................................... 73 5.4. PROPENSITY SCORE MATCHING (PSM) .............................................................. 75 5.5. INSTRUMENTAL VARIABLE (IV) APPLICATION ................................................... 77 6. ESTIMATION RESULTS .............................................................................................. 80 6.1. OLS ESTIMATES ................................................................................................... 80 6.2. PSM ESTIMATES................................................................................................... 83 6.3. IV ESTIMATES ....................................................................................................... 84 7. CONCLUSIONS ......................................................................................................... 87 APPENDIX III ................................................................................................................... 90 DATA ANNOTATION ....................................................................................................... 99 CHAPTER IV - LONG-RUN BENEFITS FROM UNIVERSAL HIGH-QUALITY PRESCHOOLING (STUDY III/III) .......................................................................... 101 1. INTRODUCTION ..................................................................................................... 101 2. BACKGROUND AND RELATED LITERATURE .......................................................... 102 3. DATA AND INSTITUTIONAL FRAMEWORK ............................................................ 104 3.1. DATA ................................................................................................................. 104 3.2. ORGANIZATION OF DAYCARE AND PRESCHOOL IN DENMARK ....................... 104 3.3. ATTENDANCE RATES AND PARENTAL SELECTION ............................................ 105 4. PRESCHOOL QUALITY ............................................................................................ 106 5. METHODOLOGY .................................................................................................... 110 6. ESTIMATION RESULTS ............................................................................................ 114 6.1. OLS ESTIMATES ................................................................................................. 114 6.2. IV ESTIMATES ....................................................................................................