The Effect of Grandparental Support on Mothers’ Labour Market Participation: An Instrumental Variable Approach

Abstract

Childcare arrangements are key in women’s ability to juggle motherhood and work outside the home. As such, the study of access to childcare and its use is of great policy relevance. We focus on a particular kind of informal childcare, the one provided by grandparents. Empirically, assessing the effect of grandparental childcare is not an easy task due to unobserved preferences. In light of the potential outcome framework, we interpret the biases resulting from unobserved preferences as arising from the non-compliance of mothers to the availability of grandparents and from preferences of grandparents for activities other than childcare. Using an instrumental variable approach on Italian data, we find that the effect of grandparental childcare on mothers’ labour supply is positive, statistically significant and economically relevant. The effect is stronger for less educated mothers, with young children and living in northern and central Italy.

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Fig. 1

Notes

  1. 1.

    Authors’ calculations from the 2004 wave of the SHARE data.

  2. 2.

    The non response rate is about 12 %. For further details on the Multiscopo surveys, see ISTAT (2006).

  3. 3.

    We tried different categorisations but the main results (Sect. 6) remain qualitatively the same.

  4. 4.

    For an overview on single motherhood and childcare choices see Raeymaeckers et al. (2008).

  5. 5.

    We cannot use SHARE since our instrumental variable is not available in this survey. Moreover, in SHARE we would have information only about two grandparents instead of four, which would provide an incomplete picture of the care of the children in the family.

  6. 6.

    This situation is similar to the Zelen’s (1979) single-consent design where patients are randomly assigned to two groups: the first group of patients is only offered with the standard therapy, while patients in the second group can choose between the standard and new therapy.

  7. 7.

    Angrist et al. (1996) also imposed two other assumptions: (i) the instrument is as good as randomised, whereby this assumption implies that assumption (2) in the text should also hold without conditioning on covariates; and (ii) stable unit treatment value assumption (SUTVA). SUTVA rules out interference among units, i.e. potential outcomes for each unit are not influenced by the level of instrument and treatment assigned to other units.

  8. 8.

    The use of standard 2SLS methods with dichotomous dependent variables is very common in empirical works, for example, Conley and McCabe (2012). We also used a bivariate probit model with the same exclusion restrictions as used in the analyses reported in the paper. Results are very similar to those presented here. We provide further details on this robustness check in Sect. 6.2.

  9. 9.

    We used the ivreg2 command in STATA (Baum et al. 2007).

  10. 10.

    This variant of the standard Cragg–Donal F test is required because we are allowing heteroskedasticity of any kind and so errors are not to be i.i.d. (Baum et al. 2007).

  11. 11.

    We tried additional specifications of the IVs obtaining similar results. In particular, we considered the number of grandparents alive and we restricted the analyses only to grandmothers. Results are available from the authors upon request.

  12. 12.

    Results not shown (available upon request).

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Acknowledgments

The research leading to these results received funding from the European Research Council under the European Union’s Seventh Framework Programme (FP7/2007-2013)/ERC Grant Agreement No. 201194-CODEC, which is gratefully acknowledged. ERC had no involvment in the study design, in the collection, analysis and interpretation of data, in the writing of the paper nor in the decision to submit the paper for publication. Our thanks go also to Arnstein Aassve, Fabrizia Mealli, Steve Pudney, Andrea Salvatori, to the editor Dimiter Philipov, and to two anonymous referees for useful comments on previous versions of the paper.

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Correspondence to Chiara D. Pronzato.

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Arpino, B., Pronzato, C.D. & Tavares, L.P. The Effect of Grandparental Support on Mothers’ Labour Market Participation: An Instrumental Variable Approach. Eur J Population 30, 369–390 (2014). https://doi.org/10.1007/s10680-014-9319-8

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Keywords

  • Female labour market participation
  • Grandparental childcare
  • Intergenerational transfers
  • Instrumental variables
  • Unobserved preferences