Abstract:
The common claim that universal child care equalizes differences in endowments rests crucially on heterogeneity in the treatment effect. In this paper, I investigate how test scores in reading, math and English at age 10 are affected by early child care attendance using marginal treatment effects. Identification comes from a large Norwegian reform that expanded highly rationed child care for toddlers unequally across municipalities and over time. Results suggest that a) IV results are small and even negative, but hide important heterogeneity, b) there is some evidence of positive selection on observable gains and c) MTEs are downward sloping, suggesting selection on unobservable gains: Children with large unobserved treatment effects are most likely to be treated. This implies that the effect of further expansions is smaller than initial rollout as the children with the largest treatment effects are already served.