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

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  • Anna Lovász

    (Hungarian Academy of Sciences)

  • Ágnes Szabó-Morvai

    (Hungarian Academy of Sciences
    HÉTFA Research Institute)

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.

Suggested Citation

  • Anna Lovász & Ágnes Szabó-Morvai, 2019. "Childcare availability and maternal labor supply in a setting of high potential impact," Empirical Economics, Springer, vol. 56(6), pages 2127-2165, June.
    • Handle: RePEc:spr:empeco:v:56:y:2019:i:6:d:10.1007_s00181-018-1423-x
    DOI: 10.1007/s00181-018-1423-x
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