Dynamic labour supply effects of childcare subsidies: Evidence from a Canadian natural experiment on low-fee universal child care
AbstractThis paper shows that a temporary incentive to join the labor market or to work more can also produce substantial life-cycle labour supply effects. On September 1997, a new childcare policy was initiated by the provincial government of Québec, the second most populous province in Canada. Licensed and regulated providers of childcare services began offering day care spaces at the subsidized fee of $5/day/child for children aged 4. In successive years, the government reduced the age requirement, created new childcare facilities and spaces, and paid for the additional costs entailed by this low-fee policy. No such important policy changes for preschool (including kindergarten) children were enacted in the nine other Canadian provinces over the years 1997-2004. Using annual data drawn from Statistics Canada's Survey on Labour and Income Dynamics and a difference-in-differences quasi-experimental methodology, the paper estimates the dynamic labour supply effects of the program. The results demonstrate that the policy had long-term labour supply effects on mothers who benefited from the program when their child was less than 6. A striking feature of the results is that they are driven by changes in the labour supply of less educated mothers.
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Bibliographic InfoArticle provided by Elsevier in its journal Labour Economics.
Volume (Year): 16 (2009)
Issue (Month): 5 (October)
Contact details of provider:
Web page: http://www.elsevier.com/locate/labeco
Mother's labour supply Preschool and primary school children Childcare policy Treatment effects Natural experiment;
Other versions of this item:
- Pierre Lefebvre & Philip Merrigan & Matthieu Verstraete, 2008. "Dynamic Labour Supply Effects of Childcare Subsidies: Evidence from a Canadian Natural Experiment on Low-Fee Universal Child Care," Cahiers de recherche 0824, CIRPEE.
- H42 - Public Economics - - Publicly Provided Goods - - - Publicly Provided Private Goods
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
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