Article ID | Journal | Published Year | Pages | File Type |
---|---|---|---|---|
969035 | Journal of Public Economics | 2011 | 11 Pages |
The strong correlation between child care and maternal employment rates has led previous research to conclude that affordable and readily available child care is a driving force both of cross-country differences in maternal employment and of its rapid growth over the last decades. We analyze a staged expansion of subsidized child care in Norway. Our precise and robust difference-in-differences estimates reveal that there is little, if any, causal effect of subsidized child care on maternal employment, despite a strong correlation. Instead of increasing mothers' labor supply, the new subsidized child care mostly crowds out informal child care arrangements, suggesting a significant net cost of the child care subsidies.
Research Highlights► A large body of descriptive evidence suggests that child care availability is a driving force of maternal employment. ► We analyze a staged expansion of subsidized child care in Norway using difference-in-differences. ► We find little, if any, causal effect of subsidized child care on maternal employment. ► The new subsidized child care mostly crowds out informal child care arrangements. ► This suggests a significant net cost of the child care subsidies.