We provide evidence on the distributional effects of Quebec’s universal child care policy. Our analysis uncovers substantial policy relevant heterogeneity in the estimated effect of access to subsidized child care across two developmental score distributions for children from two-parent families. Whereas past research reported findings of negative effects on mothers and children from these families, igniting controversy, our estimates reveal a more nuanced image that formal child care can indeed boost developmental outcomes for children from some households: particularly disadvantaged single-parent households. We present suggestive evidence that the heterogeneity in policy effects is consistent with differences in home learning environments.

This paper introduces an empirical strategy to estimate dynamic treatment effects in randomized trials that provide treatment in multiple stages and in which various noncompliance problems arise, such as attrition and selective transitions between treatment and control groups. Our approach is applied to the highly influential four-year randomized class size study, Project STAR. We find benefits from attending small classes in all cognitive subject areas in kindergarten and first grade. We do not find any statistically significant dynamic benefits from continuous treatment versus never attending small classes following grade 1. Finally, statistical tests support accounting for both selective attrition and noncompliance with treatment assignment.