Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/278955 
Year of Publication: 
2023
Series/Report no.: 
IZA Discussion Papers No. 16257
Publisher: 
Institute of Labor Economics (IZA), Bonn
Abstract: 
This paper combines multiple data sources to study the impact of the minimum wage on service quality and consumer well-being within the child care market. Although child care firms increase teacher pay in response to minimum wage reforms, we find no impact on employment levels. Instead, providers respond by implementing a range of other revenue-enhancing and cost-saving practices, such as raising prices, increasing child-to-staff ratios, and serving fewer children in the child care subsidy system. We also find evidence that service quality increases: staff turnover declines, teachers are more likely to make human capital investments, and teacher-child interactions improve. Despite the increase in quality, parents report that they are less satisfied with their child care provider, a result we attribute to the increase in prices.
Subjects: 
child care
child care quality
minimum wage
JEL: 
J13
J15
J21
K39
Document Type: 
Working Paper

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