Effects of Nonmaternal Child Care on Inequality in Cognitive Skills. Discussion Papers.

As a result of changing welfare policies, large numbers of children of poor, uneducated mothers are likely to receive care from others as their mothers enter the workforce. How will this change affect inequality in cognitive skills among young children? Analysis of data on children of mothers in the National Longitudinal Study of Youth provides tentative evidence in support of the position that nonmaternal care tends to magnify inequality. Although ordinary least squares regressions reveal no effects of child care, fixed-effects models that control for differences between families indicate that children of high-income, well-educated mothers benefit from center-based care, but children of low-income, poorly educated mothers suffer a cognitive disadvantage from attending day care centers. Home-based care, however, is not associated with cognitive performance. Results from nonparametric analyses are consistent with the findings from fixed-effects models. The key results rely mainly on a relatively small sample of about 700 children in 300 families that sent their children to different types of care, and they do not pertain to families with only one child, so caution is warranted in generalizing the findings. (Contains 5 figures, 7 tables, and 34 references.) (Author/SLD)