Informal day-care centre brings about a negative effect on kids' cognitive development, found in a study.
The study found that children who go to a formal preschool program or a licensed day-care centre have essentially the same standardized test scores as those who stay home with mom.
Conversely, each year of informal care reduces a child's test scores by 2.6 percent versus staying with mom.
"Extensive research has shown that a child's early achievement is a strong predictor of outcomes later in life," Raquel Bernal of the Universidad de los Andes in Columbia, who performed the research with Michael Keane of the University of New South Wales in Sydney, Australia, said.
"This research suggests that separation from the mother has a negative effect on a child's cognitive ability, but this can be offset by the appropriate choice of day-care," Bernal explained.
The study took advantage of changes made in the 1990s to U.S. welfare laws that encouraged single mothers to enter the workforce.
Before the changes, about 59 percent of single mothers worked outside the home, but by 2001, that number increased to 72 percent.
The researchers compared test scores for children born shortly before and after the law change to find out if increased employment had an effect on children's test scores, after controlling for outside factors such as socio-economic status.
The study found overall that use of childcare reduces a child's test scores significantly.
But when the researchers divided the children in the sample into those who received formal and informal care, they found that the reduction in tests scores was driven solely by children in informal care.
In other words, formal care was found to have no adverse effect on test scores.
"The policy implication is that it would be desirable to provide financial support that would enable single mothers to spend more time with their children, or support to place children in formal care at early ages," Bernal added.
The study has been published in the July issue of the Journal of Labor Economics.