The early bird gets the germs? The impact of early daycare attendance on children’s health

In recent decades, the share of very young children in daycare has significantly increased in many OECD countries, including Germany. Despite the critical role of child health in development and later life success, the impact of early daycare attendance on health has received little attention in the economic literature. This study examines the effects of a substantial daycare expansion in Germany on children’s dynamic mental and physical health outcomes by age. Drawing on a unique set of administrative health records covering 90% of the German population over a ten-year period, I exploit exogenous variation in daycare attendance induced by this expansion. My findings indicate a substitution of illness spells from elementary school to the early years of daycare. Specifically, early daycare attendance is associated with a 5–6 percent increase in the prevalence of respiratory and infectious diseases, as well as healthcare consumption among children aged 1–2 years. Conversely, by elementary school age (6–10 years), the prevalence of these conditions decreases by a similar magnitude. However, I find no evidence of daycare attendance affecting mental disorders, obesity, injuries, vision problems, or healthcare costs. Additional analyses reveal earlier detection of vision problems and a reduction in obesity among children from disadvantaged backgrounds, as well as beneficial spillover effects on parents.