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An Empirical Assessment of the Drivers of Formal and Informal Childcare Demand in European Countries

Author

Listed:
  • Laurène Thil

    (HIVA & KU Leuven)

  • Laté A. Lawson

    (University of Strasbourg)

  • Mathieu Lefebvre

    (Aix Marseille University, CNRS, AMSE)

Abstract

How does the mother’s labour supply affect the household’s demand for childcare? And thus are formal and informal childcare substitutable? In this paper, we address these two questions using micro-data for 14 European countries observed over the period between 2010 and 2017. Relying on a Control Function Approach to account for the endogeneity between childcare and the mothers’ labour supply, we identify different factors affecting the demand for formal and informal childcare. The results show that the mother’s labour supply is a key element in understanding the demand for childcare and suggest that the more the mother participates in the labour market, the higher the household’s demand for childcare services. Moreover, our results support the substitutability hypothesis between formal and informal childcare. Policymakers aiming to promote mothers’ employment should increase the availability of formal childcare services, as this will increase labour supply by mothers and reduce the use of informal care arrangements.

Suggested Citation

  • Laurène Thil & Laté A. Lawson & Mathieu Lefebvre, 2023. "An Empirical Assessment of the Drivers of Formal and Informal Childcare Demand in European Countries," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 170(2), pages 581-608, November.
    • Handle: RePEc:spr:soinre:v:170:y:2023:i:2:d:10.1007_s11205-023-03198-3
    DOI: 10.1007/s11205-023-03198-3
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    More about this item

    Keywords

    Childcare; Mothers’ labour supply; Instrumental variable;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • C26 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Instrumental Variables (IV) Estimation

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