The market for childcare and the role of the government in the childcare market have grown enormously as mothers of young children have entered the labour force in very large numbers. Economists have made important contributions to understanding many aspects of childcare. This article focuses on (a) the effect of the price of childcare on labour force participation of mothers of young children, (b) the effect of childcare and early childhood interventions on children, and (c) the rationale for and effects of government involvement in childcare. Fruitful avenues of additional research are suggested.
KeywordsAdverse selection Child development Childcare Childcare subsidies Education production function Head start Human capital Imperfect information Labour force participation Market imperfections Moral hazard Poverty Random assignment Selfsufficiency Women
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