A tale of two methods: Comparing regression and instrumental variables estimates of the effects of preschool child care type on the subsequent externalizing behavior of children in low-income families

We apply instrumental variables (IV) techniques to a pooled data set of employment-focused experiments to examine the relation between type of preschool childcare and subsequent externalizing problem behavior for a large sample of low-income children. To assess the potential usefulness of this approach for addressing biases that can confound causal inferences in child care research, we compare instrumental variables results with those obtained using ordinary least squares (OLS) regression. We find that our OLS estimates concur with prior studies showing small positive associations between center-based care and later externalizing behavior. By contrast, our IV estimates indicate that preschool-aged children with center care experience are rated by mothers and teachers as having fewer externalizing problems on entering elementary school than their peers who were not in child care as preschoolers. Findings are discussed in relation to the literature on associations between different types of community-based child care and children's social behavior, particularly within low-income populations. Moreover, we use this study to highlight the relative strengths and weaknesses of each analytic method for addressing causal questions in developmental research.