Recession vs Policy Shock: 2008, Medicare Part D & Grandparent Childcare

Many studies have found grandparent provided childcare (GPCC) is
of higher quality on average than center-based care, and that the availability of childcare itself increases the labor foce participation rates of
women. This has led to this investigation into the influence of income
and wealth on the supply of GPCC. Using restricted-use data from the
Health and Retirement Survey, this investigation focuses on labor income,
household wealth, age, health factors, family size, and period dummies to
understand how the 2008 recession affected GPCC provision. This study
is the first of its kind to include state fixed-effects and to focus on the
2008 recession. Results suggest that there is no difference between the recession and recovery periods themselves but that work income and wealth
are significant predictors with small magnitude. Sub-sample regressions
run by sex and coupled status suggest that work income influences female
GPCC decisions more than male and coupled respondents more than single. This finding suggests that socially constructed systems of constraint
may be present in the decision making studied. Finally, using an inverseprobability weighted regression adjusted estimator, the effect of Medicare
Part D on providing any GPCC is tested. Limits to the data leaves the
effect ambiguous but suggests confirmation of the fixed-effects model.