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Childcare availability and maternal labor supply in a setting of high potential impact

  • Anna Lovász
  • Ágnes Szabó-Morvai
Article

Abstract

We estimate the effect of subsidized childcare availability on Hungarian mothers’ labor supply, using a discontinuity in kindergarten eligibility at age 3 of children. The effect is identified in a setting where policy intervention has a high potential impact, since maternal labor supply is very low under age 3 of children, but high for mothers with older children. We find that access to subsidized childcare increases maternal labor supply by 11.7 percentage points or 24%, an impact that is higher than what has been found in previous quasi-experimental studies from most other countries. However, the potential effectiveness of future childcare expansion under age 3 may be constrained by further institutional factors, such as very long parental leave, traditional cultural views regarding maternal employment and institutional childcare, and the lack of flexible work forms. A comprehensive policy approach, including linked reforms of these other factors, is needed to achieve such a high effect.

Keywords

Subsidized Childcare Maternal Labor Supply Eligibility Cutoff Instrumental Variables 

JEL Classifications

H24 J13 J22 

Notes

Funding

This research was funded by a National Hungarian Research Grant (Nos.: KJS-K-101665/2011 and KJS-K-101862/2011).

Compliance with ethical standards

Conflict of interest

The authors declare that they have no conflict of interest.

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Copyright information

© Springer-Verlag GmbH Germany, part of Springer Nature 2018

Authors and Affiliations

  1. 1.Institute of Economics, Centre for Economic and Regional StudiesHungarian Academy of SciencesBudapestHungary
  2. 2.HÉTFA Research InstituteBudapestHungary

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