Economic Effects of Quality Regulations in the Daycare Industry

We estimate reduced form models to discern the effect of state regulation of the quality of center and family day care. Specifically, we consider the effects of the number of mandated inspections, limits on group size and staff/child ratio, and staff training requirements on equilibrium price and hours of care and the quality of care as measured by the actual staff/child ratio. The specification of the reduced form model is derived from an eight equation market model for wages and work hours, type of child care chosen, price and hours of care and a set of hedonic equations for the characteristics of care. The results indicate strongly that child care regulations do affect equilibrium price, hours of care, and staff/child ratios. Child care regulations are binding. In equilibrium, only regulations regarding staff training appear to have consistently desirable effects. Such regulations decrease equilibrium price and hours of care and increase the staff/child ratio for both centers and family day care. Regulations of group size and the staff/child ratio have significant effects, but the welfare implications of the effects are more ambiguous. Tax deductions and subsidies for child care have similarly ambiguous welfare effects. For example, households that take a tax deduction for child care pay higher prices for care, consume more hours of care and consume higher quality day care.

Effects of Information Provision in an Vertically Differentiated Market

We study the effects of consumer information on equlibrium market prices and observable product quality in the market for child care. Child care markets offer a unique opportunity to study these effects because of the existence of resource and referral agencies (R&Rs) in some markets. R&Rs provide consumers with information on availability, price, and observable characteristics of care. To understand the effects of information provision in markets like child care, we examine the effects of information provision in a model of vertical differentiation. We show conditions in which increased consumer information reduces price dispersion, maximum price, and average price. With this model we examine empirically the effects of R&Rs on the distribution of child care prices and on the distribution of staff-child ratios. We estimate separate models for the distribution of prices and staff-child ratios for infants, toddlers, preschoolers and school age children because of regulatory and care differences across age groups. We find that R&Rs have economically large and statistically significant effects on the distribution of prices for the care infants and toddlers. Geographic markets with R&Rs have significantly less price dispersion and lower maximum prices. There is also some evidence that markets with R&Rs have lower average prices.Information provision via R&Rs has no significant effects on staff-child ratios. These findings are generally consistent with search theory and support the contention that information provision can intensify price competition.

Unintended Consequences? Welfare Reform and the Working Poor

We have used a unique longitudinal database that incorporates information from diverse administrative and research sources to examine the impact of the early stages of welfare reform on poor working families who do not receive cash assistance. Our data are for 2791 working poor families from March 1996 through February 1997. Using a number of different estimation techniques, we find that the impact of the simultaneous October 1996 implementation of welfare reform and a federal minimum wage increase was to lower the earnings of the working poor families in our sample by approximately 6%. We find that increases in funding for Child Care Subsidies associated with welfare reform led to a significant increase in earnings. On net, the increase in Child Care Subsidies and the decrease in earnings because of the October 1996 changes approximately cancel out, with the representative family in our sample experiencing an estimated monthly earnings change of between -$18 and$68, with an earnings gain of $25 being most likely.

Strategic uses of organizational form : evidence from the cable television industry

Thesis (Ph. D.)--Massachusetts Institute of Technology, Dept. of Economics, 1993.Includes bibliographical references (leaf 148).by Tasneem Chipty.Ph.D

Competitor Collaborations in Health Care: Understanding the Proposed ACO Antitrust Review Process

From a policy perspective, it is unclear whether the ACO review should be more or less stringent than the merger review process. Tasneem Chipty (Analysis Group, Inc.)

Vertical Integration, Market Foreclosure, and Consumer Welfare in the Cable Television Industry

I examine the effects of vertical integration between programming and distribution in the cable television industry. I assess the effects of ownership structure on program offerings, prices, and subscriptions, and I compare consumer welfare across integrated and unintegrated markets. The results of this analysis suggest two general conclusions. First, integrated operators tend to exclude rival program services, suggesting that certain program services cannot gain access to the distribution networks of vertically integrated cable system operators. Second, vertical integration does not harm, and may actually benefit, consumers because of the associated efficiency gains.