Abstract
We analyze the impact on maternal employment of a universal school reform in Norway which lowered the school starting age from seven to six. We use a regression discontinuity approach exploiting exogenous variation in the compulsory school enrollment rule caused by the reform. Our results reveal positive short-term effects on labor supply (approximately five percentage points) and on earnings (about 12600/1350 NOK/Euro). Subgroup analyses show that the positive effects are much stronger for mothers with low wage potential, a group of mothers that were less likely to use formal childcare prior to the reform. The positive effects for this subgroup of mothers suggest that expanding child-care can be an effective tool for increasing labor supply of mothers who previously had relatively low labor market earnings potential.
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Notes
Drange et al. (2012) find no effects of the reform on pupils’ long-term educational achievement in secondary school.
Two other major reforms that might have influenced mothers labor supply were implemented in the 1990s. In 1998, the Cash-for-Care reform was implemented, offering a monthly lump-sum subsidy to families with one-year-old children that did not attend publicly subsidized childcare. This reform was implemented after the period we study in this paper. In 1993, the length of paid parental leave in Norway was extended, but this was after the mothers in our sample gave birth. Below we further show that treatment and control groups are balanced on the probability of having older or younger children.
These numbers are calculated from a survey conducted by Statistics Norway covering approximately 30 per cent of the municipalities in Norway in the spring of 1997.
There are almost no missing data in the administrative registers. We use listwise deletion to handle the few missing observations.
G is the basic level of support in the Norwegian Social Security System.
We choose 1994 to allow some distance to the years of observation.
Oppenheim Mason and Kuhlthau (1992) analyze employment barriers for sample of Detroit-area mothers of preschool-aged children. The results suggest that policies to increase the supply of child care or to lower its cost could increase female labor supply by a substantial fraction. Baum (2002) use a hazard framework to examine a mother’s decisions about work and hours of work after childbirth. The focus is on low-income mothers with infants. The results showed that child care costs are a barrier to work that is larger for low-income mothers than for non-low-income mothers.
We interpret the increase in labor supply as a response to changes in childcare costs and availability. One might argue that school start provides an “institutional signal” for when mothers should return to work, which might explain part of the effects we find. Still, believing in the natural experiment we are exploiting, we argue that the effect we find mainly reflect impacts of reduced child care costs and increased capacity.
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Acknowledgment
This research was supported by two Norwegian research council projects, “Trygd i kontekst” and Center for Research on Gender Equality (CORE). The authors gratefully acknowledge this support. We would like to thank Andreas Kotsadam, seminar particpants at the Institute for Social Research, as well conference participants at the ESPE conference in Izmir Turkey in June 2015, and at the The EEA conference in Manheim in August 2015. Previous versions of this paper (using other identification strategies) have circulated under the titles “School Enrollment and Mothers’ Labor Supply: Evidence from a Universal School Reform” and “Free Childcare and Mothers’ Labor Supply: Evidence Using a School Starting Age Reform”
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Appendix
Tables 5, 6, 7, 8, 9 and Fig. 5
Fig. 5
RD on pre-determined covariates. Optimal bandwidths (CCT)
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Finseraas, H., Hardoy, I. & Schøne, P. School enrolment and mothers’ labor supply: evidence from a regression discontinuity approach. Rev Econ Household 15, 621–638 (2017). https://doi.org/10.1007/s11150-016-9350-0
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DOI: https://doi.org/10.1007/s11150-016-9350-0