Childcare availability and maternal labor supply in a setting of high potential impact
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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.
KeywordsSubsidized Childcare Maternal Labor Supply Eligibility Cutoff Instrumental Variables
JEL ClassificationsH24 J13 J22
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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