[ Abstract / Highlights ]
This paper estimates the causal effect of education-oriented vs. care-oriented preschools on child development. We use a unique quasi-experiment from Japan that exploits plausibly exogenous regional and temporal variation in the relative availability of different preschools. We find that attendance at an education-oriented preschool is associated with significant improvements in mathematical and linguistic achievement that manifest later in adolescence. Positive effects can also be found for socioemotional measures. Ascending marginal treatment effect (MTE) curves suggest an inverse selection pattern: children that are least likely to enroll in the education-oriented preschool gain the most from it. This heterogeneity is mainly due to specific features of education-oriented preschools (i.e., educational orientation, shorter operating hours, and peer effects), while gains from enrollment in care-oriented preschools appear more homogeneous.