Child care quality and child development

Development in early childhood predicts schooling and labor market outcomes in adulthood. In this paper we use a fixed effects identification strategy to assess how differences in the quality of child care affect the communication, fine motor, and problem solving skills of infants and toddlers. We show that children have significantly better development outcomes in classrooms with more experienced caregivers, and classrooms with caregivers who demonstrate higher-quality interactions with children. There is substantial heterogeneity in the effects of caregiver quality on child development. Parents either cannot observe, or do not value, the quality of care.