Naci H. Mocan

The Supply of Quality in Child Care Centers

We use data from a sample of day care centers to estimate the relationships between cost and the quality of the child care service provided, and between revenue and quality. We use a measure of child care quality derived from an instrument designed by developmental psychologists. This measure of quality has been found to be positively associated with child development. Taking the estimated cost-quality and revenue-quality relationships as given, we then estimate the objective functions of the firms and compute the supply function for quality. The results indicate that (1) the estimated cost function is inconsistent with the implications of cost-minimization; (2) for-profit firms operate at a positive level of marginal cost, but non-profit firms operate at zero or negative marginal cost; (3) revenue is positively but weakly associated with quality; and (4) the supply of quality is inelastic, with point estimates of the supply elasticity of .04-.05 for both for-profit and non-profit firms. Implications of the results for child care policy are discussed.

Cost Functions, Efficiency and Quality in Day Care Centers

Using a new data set, this paper finds that there is no quality difference between nonprofit and for-profit day care centers, and with the exception of one segment of the nonprofit sector, there is no efficiency difference. The cost of increasing the quality from mediocre to good is between 12 and 16 cents per child-hour. Centers have inelastic demand for workers. Child care workers with 13 to 15 years of education and workers with more than 16 years of education are substitutes; workers with more than 16 years of education are complements to workers with 12 or fewer years of education. There are economies of scale and scope in production.

Business cycles and fertility dynamics in the United States

Using recent developments in time-series econometrics, this paper investigates the behavior of fertility over the business cycle. The sex-specific unemployment rates, the divorce rate and the fertility rate are shown to be governed by stochastic trends. Furthermore, fertility is determined to be cointegrated with the divorce rate.In the bivariate vector-autoregressions between fertility and unemployment, an increase in the female or male unemployment rates generate a decrease in fertility, which is consistent with the findings of previous time-series research concerning the procyclical behavior of fertility. However, when the models include the divorce rate and the proportion of young marriages as additional regressors, shocks to the unemployment rates bring about an increase in fertility, implying the countercyclicality of fertility. This outcome holds for the time period 1948–1982, as well as 1972–1982.

The Impact of Legalized Abortion on Adolescent Childbearing in New York City.

In this paper we estimate the impact on adolescent childbearing of the liberalization of the New York State abortion law in 1970. Using Box-Jenkins time series techniques to analyze monthly data on the number of births to White and Black adolescents from January 1963 to December 1987, we found that the level of births to Black adolescents living in New York City fell 18.7 percent, approximately 142 fewer births per month, after the law became effective; the level of White births fell 14.1 percent, approximately 111 fewer births per month. Projections based on the fitted model suggest that a ban on legalized abortion today would have a major impact on adolescent childbearing in New York City as well as other parts of the country, although the magnitude of the change would vary according to local conditions.

Salaries and Work Effort: An Analysis of the European Union Parliamentarians

Prior to July 2009, salaries of the members of the European Parliament were paid by their home country and there were substantial salary differences between parliamentarians representing different EU countries. Starting in July 2009, the salary of each member of the Parliament is pegged to 38.5% of a European Court judge’s salary, paid by the EU. This created an exogenous change in salaries, the magnitude and direction of which varied substantially between parliamentarians. Parliamentarians receive per diem compensation for each meeting day attended during plenary sessions, but salaries constitute fixed income as they are independent of attendance to the Parliament. Using detailed information on each parliamentarian of the European Parliament between 2004 and 2011 we show that an increase in salaries reduces attendance to plenary sessions. An increase in salaries has also a negative impact on questions asked by parliamentarians in plenary sessions but it has no impact on other job-related activities.

The consequences and costs of maternal substance abuse in New York City: A pooled time-series, cross-section analysis☆

We use a pooled time-series cross-section of live births in New York City between 1980 and 1989 to investigate the dramatic rise in low birthweight, especially among Blacks, that occurred in the mid 1980s. After controlling for other risk factors, we estimate that the number of excess low birthweight births attributable to illicit substance abuse over this period ranged from approximately 1,482 to 3,359. The increase represents between 3.2 and 7.3% of all LBW over the period resulting in excess neonatal admission costs of between

Education, Cognition, Health Knowledge, and Health Behavior

18 and

Judges, Juveniles and In-group Bias

41 million.

The Impact of Education on Health Outcomes and Behaviors in a Middle-Income, Low-Education Country

Using data from NLSY97, we analyze the impact of education on health behavior. Controlling for health knowledge does not influence the impact of education on health behavior, supporting the productive efficiency hypothesis. Accounting for cognitive ability does not significantly alter the relationship between education and health behavior. Similarly, the impact of education on health behavior is the same between those with and without a learning disability, suggesting that cognition is not likely to be a significant factor in explaining the impact of education on health behavior.

Can Consumers Detect Lemons? Information Asymmetry in the Market for Child Care

We investigate the existence of in-group bias (preferential treatment of one’s own group) in court decisions. Using the universe of juvenile-court cases in a US state between 1996 and 2012 and exploiting random assignment of juvenile defendants to judges, we find evidence for negative racial in-group bias in judicial decisions. All else being equal, black (white) juveniles who are randomly assigned to black (white) judges are more likely to be placed in custody, as opposed to being placed on probation, and they receive longer sentences. Although observed in experimental settings, this is the first empirical evidence of negative in-group bias based on a randomization design outside the lab. We provide explanations for this finding.