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Description:
This paper studies the effects of day care exposure on behavioral problems and mental health as well as on various aspects of physical health, at various ages during childhood. We draw on a unique set of comprehensive individual-level out-patient and inpatient health care register data from Sweden over the period 1999-2008 merged with other population register data. By exploiting variation in daycare exposure by age generated by a major day care policy reform, we estimate cumulative and instantaneous effects on child health at different ages. We find beneficial cumulative impacts on behavioral and mental health at primary school ages, and substitution of the incidence of infections from primary school ages to low ages. The evidence suggests that the behavioral effects are mostly driven by children from low socio-economic households. Day care usage affects health care utilization and leads to a moderate reduction in health care costs.