Minimum Wage, Worker Quality, and Consumer Well-Being: Evidence from the Child Care Market

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 16257

Classification and Topics

• Classification: Wirtschaft ; Fertility; Family Planning; Child Care; Children; Youth ; Economics of Minorities, Races, Indigenous Peoples, and Immigrants; Non-labor Discrimination ; Labor Force and Employment, Size, and Structure ; Other Substantive Areas of Law: Other
• Subject: child care ; child care quality ; minimum wage

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Brown, Jessica H. ; Herbst, Chris M.
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/278955
• Last update: 10.03.2025, 11:45 AM CET