INFORMATION PROVISION: Explanatory Variables

Posted by Kathryn Schwartz on July 23, 2014

Using the group level data, we also construct average staff-child ratio (ASCRATI, ASCRATT, ASCRATPS, and ASCRATS, for infants, toddlers, preschoolers, and school-age, respectively). Table 1 (a) presents descriptive statistics for the price and staff/child ratio variables at the center level and Table 2 and 3 presents descriptives at the market-level.

Explanatory Variables

We obtain measures of exogenous demand-side factors affecting the price and quality of care offered by centers at the five-digit zip code level from the 1990 Census of Population and from a special survey by the National Governors’ Association (1990). Specifically, we include median family income (INCOME), fraction of children less than 13 who are less than one year old (FINFANT), fraction of children less than 13 who are between one and three (FTODDLER), fraction of children less than 13 who are three through five (FPRESCH), and fraction of children less than 13 who are school-age (FSCHOOL), fraction of children less than 13 in the population (PKIDS), population density (DENSITY), fraction of population college educated (COLLEGE), fraction of the population black (PBLACK), percent of males in labor force working full time (MALEWK) and a binary variable equal to one if the state allowed state taxes to be reduced for child care expenses (TAXDED).20 Data on income is deflated by the regional cost of living index. Demographic variables are aggregated to the market level, to correspond to each of the center-market definitions described above.

We obtain measures for exogenous supply-side characteristics that may affect equilibrium prices and stafi/child ratios from the PCS, the Census of Housing, various compilations of state regulations (Morgan 1986, 1993) and a special survey of local child care regulations that we conducted. Specifically, we include the percent of centers in the market that are for profit (PROFIT) and percent of centers that are part of a national or local chain (NLCHAIN), the median hourly wage of center teachers by county (WAGES) and the median contract rent per room (RENT) by county. Data on wages and rents are deflated by the regional cost of living index.

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