Child Skill Accumulation in One- and Two-Parent Families

In this paper, I examine the role of family structure in child skill accumulation. I establish empirically that one- and two-parent families use different technologies to invest in their children: the choices of one-parent families are more sensitive to child care’s price. I analyze the effect of child care subsidies using a general equilibrium framework with endogenous family formation. I find that subsidies improve skill outcomes for children, especially those raised by one-parent, low-income families, thereby narrowing the gap in child outcomes across family structures. Exogenous attributes of family structure drive between 28 and 40 percent of this gap.