It may be the most hotly disputed and emotionally loaded question that American parents face: Are children better off if a parent stays at home?

The evidence is already quite strong that staying at home during a child’s first year of life can have long-term benefits. That’s why most industrial nations (though not the United States) guarantee at least some paid parental leave for working mothers and fathers.

What’s been less clear is whether stay-at-home parenting also benefits older children who may already be in elementary or even middle school. On the one hand, the additional income from a second salary is crucial for many families. On the other hand, it is hard to match the attention and guidance that an involved parent can provide.

It’s an issue for fathers and mothers alike, but women account for the overwhelming majority of parents who give up outside jobs to care for their children. The ranks of those women have shrunk dramatically. In the United States, about 70 percent of mothers with young children now have jobs outside the home — up from 10 percent in 1940.

But a new study, drawing on extensive data from Norway, found potentially dramatic benefits for older children when their parents had more opportunity to stay at home. Indeed, the benefits may be even greater for children in the United States than they were for children in Norway.

The study comes from Eric Bettinger, associate professor at Stanford Graduate School of Education with a courtesy appointment at Stanford Graduate School of Business, and two Norwegian scholars. The researchers examined the impact of Norway’s “Cash for Care” program, which offers a generous cash payment to stay-at-home parents with children below the age of 3.

Norway's Program

By way of background, Norway has long had excellent publicly subsidized daycare. Working parents are also entitled to 42 weeks of fully paid parental leave. About 84% of Norwegian mothers have outside jobs.

But in 1998, the government launched “Cash for Care” as an alternative cash subsidy to parents who wanted to care for infants and toddlers at home. Parents who accepted “Cash for Care” were still allowed to hold jobs, but they couldn’t use the publicly subsidized daycare.

Bettinger and his colleagues — Mari Rege at the University of Stavanger and Torbjørn Hægeland at Statistics Norway — didn’t focus on how Cash for Care affected infants and toddlers. Instead, they looked at what happened to older siblings who became indirect beneficiaries.

In what social scientists call a “natural experiment,” the researchers looked for differences in school performance between older children who became these side-beneficiaries and older children who did not.

At the time Cash for Care began in 1998, the extent to which older children became beneficiaries depended on how close their youngest sisters and brothers were to the age of 3. If a younger sibling was 1 in 1998, the older child was a side-beneficiary for two years. If the younger child was 2 in 1998, the older child got the benefit for just one year. That allowed the researchers to look for correlations between improvements in school performance and the number of years that an older child’s parent stayed at home.

The researchers analyzed the school performance of some 68,000 children with younger siblings who had been born shortly before or after the Cash for Care program began.

The researchers found that only about 5 percent of parents actually changed their work choices in response to the new payments. Parents in higher-income families, who could more easily afford to give up one parent’s salary, were the most likely to leave the work force. Lower-income parents, by contrast, tended to keep working even if they collected the cash payments. Many relied on informal child care from relatives or friends.

Nevertheless, the older children in families that did qualify for the payments tended to do better in school. On average, the older siblings in those families increased their grade-point averages in 10th grade by .02 points on Norway’s grading scale of 1 to 6 points. The increases seemed strongest among children around the age of 6 and 7 at their sibling’s birth.

The bump in grades may sound like a very modest increase, but it is too big to write off as statistical noise, Bettinger says. In addition, the improvement is potentially much more dramatic than it seems. That’s because only 5 percent of parents actually changed their decision about work in response to the new subsidy. If those few parents were responsible for the overall jump in school performance — and the researchers think they were — it means that the individual parents had an outsized impact on their own children.

“The results suggest that even older students in middle or elementary school could use guidance from their parents,” Bettinger says. “For years, we have known that parental presence is extraordinarily important in the very early childhood years. What we’re finding is that parents continue to be important much further along in a child’s life than we had previously thought.”

Impact in the U.S.?

Bettinger suspects the benefits could actually be even bigger for American children. That’s because Norway already offers excellent and affordable childcare, better than what is available to most American families. As a result, the added benefit of having a parent stay at home is probably smaller in Norway than it would be in the United States.

But Bettinger cautions that the benefits may be limited to relatively affluent families. In Norway, parents at the bottom of the income ladder tended to keep working even if they collected the cash payments. If children in low-income families are simply left under informal supervision, or simply left to watch TV, they may not be any better off than they were before.

“It could be that the benefits of a parent staying at home are mostly in middle-class and affluent families,” Bettinger cautions. “That’s still a good thing, but the impact on low-income families may not be there. While clearly parental involvement matters, policies which attempt to improve parental involvement may not actually help the families in the greatest need.”

Other things being equal, however, the results from Norway suggest that it is hard to substitute for the care and attention of a parent at home.

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This article originally appeared on Insights by Stanford Business.