Prior to an expanded child care subsidy program in Illinois, the labor force participation rate of single mothers in Illinois was 45% and in Wisconsin was 48%. After Illinois expanded its child care subsidy program, the participation rate increased to 58% in Illinois and to 51% in Wisconsin. The expanded child care program in Illinois is estimated to increase labor force participation of single mothers by how much according to a difference-in-differences estimator?

Question

Quizplus · Accepted Answer

The difference-in-differences estimator is calculated as follows: [(58% - 45%) - (51% - 48%)] = [13% - 3%] = 10%. This measures the effect of the policy change in Illinois, controlling for the trend in Wisconsin.

Prior to an Expanded Child Care Subsidy Program in Illinois