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Low-fee ($5/day/child) Regulated Childcare Policy and the Labor Supply of Mothers with Young Children: A Natural Experiment from Canada

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  • Pierre Lefebvre
  • Philip Merrigan

Abstract

On September 1st, 1997, a new childcare policy was initiated by the provincial government of Québec in Canada. Childcare services licensed by the Ministry of the Family (not-for-profit centre, family-based, and for-profit centre under the agreement) began offering daycare spaces at the reduced parental contribution of $5 per day per child for children of age 4. For each following year, the government reduced the age requirement and engaged in a plan to create new childcare facilities and pay for the cost of additional $5 per day daycare spaces. On September 2000, the low-fee policy applied to all children aged 0-59 months (not in kindergarten) and the number of subsidized places increased from 82,000 in 1997 to 163,000 by the end of year 2002, while the number of eligible children, zero to four years old, declined from 445,000 to 373,000 over the same period. Using annual data (1993 to 2002), drawn from Statistics Canada’s Survey on Labour and Income Dynamics (SLID), this study attempts to estimate the effect of the policy on the labour supply behaviour of Québec mothers with pre-school children, aged from 0 to 5 years old. The analysis examines the impact of the policy on the following outcomes: labour force participation, number of annual weeks and hours worked, annual earned income and whether the job was full-time or part-time for mothers who declared having a job during the reference year. A non-experimental evaluation framework based on multiple pre- and post-treatment periods is used to estimate the effect of the childcare regime. The econometric results support the hypothesis that the childcare policy, simultaneously with the transformation of public kindergarten from a part-time to a full-time basis, had a large and statistically significant impact on the labour supply of Québec’s mothers with pre-school children. The estimates also suggest, though less convincingly, that the size of the impact increased simultaneously with the positive growth in the number of low-fee spaces. Le 1er septembre 1997, le gouvernement du Québec instaurait une nouvelle politique de subventions aux services de garde. Les milieux de garde reconnus par le ministère de la Famille et de l’Enfance ont commencé à offrir des places à contribution réduite (5 $/jour) pour les enfants qui avaient atteint l'âge de 4 ans au 30 septembre. En outre, le gouvernement s’engageait à réduire progressivement (chaque année) l’âge d’admissibilité à ces places et à augmenter leur nombre dans le réseau des services de garde subventionnés. Malgré l’ampleur des dépenses publiques pour ce programme, il n’y a pas d’étude qui a porté sur la réalisation des objectifs poursuivis par cette politique. Cette étude vise à combler en partie cette lacune en analysant les effets de la politique de garde sur l’offre de travail des mères québécoises. Elle s’appuie sur les données annuelles recueillies de 1993 à 2002 par l’Enquête sur la dynamique du travail et des revenus (EDTR) de Statistique Canada. L’évaluation des effets de la politique de garde sur différents indicateurs du marché du travail (taux d’occupation d’un emploi, semaines et heures annuelles travaillées, revenu annuel de travail, participation à temps plein au marché du travail) adopte une approche « quasi expérimentale », c’est-à-dire que les différences entre les mères québécoises (groupe traitement) et les mères des autres provinces (groupe de contrôle) sont comparées avant et après la mise en place du régime de subventions aux services de garde. Nos résultats sont conformes à l’hypothèse selon laquelle le programme de soutien aux services de garde mis en place par le gouvernement du Québec, en même temps que la maternelle cinq ans gratuite et à temps plein, ont eu un impact important et statistiquement significatif sur l’offre de travail des mères ayant des enfants de 5 ans ou moins. Les résultats économétriques soutiennent aussi, quoique de façon moins convaincante, que l’ampleur de l’effet a augmenté parallèlement à l’augmentation du nombre de places à contribution réduite de 1998 à 2002. En effet, nous ne pouvons rejeter l’hypothèse selon laquelle l’effet de la politique est le même pour les années 1999 à 2002. Cependant, la régularité de la progression de cet effet pour toutes les variables d’offre de travail laisse croire que l’augmentation du nombre de places a eu un rôle important à jouer dans l’augmentation de l’offre de travail.

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Bibliographic Info

Paper provided by CIRANO in its series CIRANO Working Papers with number 2005s-09.

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Date of creation: 01 Mar 2005
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Handle: RePEc:cir:cirwor:2005s-09

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Keywords: labor supply of mothers; childcare policy; panel data; offre de travail des mères; politique des services de garde; données de panel;

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References

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Citations

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Cited by:
  1. Evridiki Tsounta, 2006. "Why Are Women Working so Much More in Canada? An International Perspective," IMF Working Papers 06/92, International Monetary Fund.
  2. John Myles & Feng Hou & Garnett Picot & Karen Myers, 2009. "The Demographic Foundations of Rising Employment and Earnings among Single Mothers in Canada and the United States, 1980–2000," Population Research and Policy Review, Springer, vol. 28(5), pages 693-720, October.
  3. Michael Baker & Jonathan Gruber & Kevin Milligan, 2005. "Universal Childcare, Maternal Labor Supply, and Family Well-Being," NBER Working Papers 11832, National Bureau of Economic Research, Inc.
  4. Pierre Lefebvre & Philip Merrigan, 2005. "The Québec’s Experiment of $5 per Day per Child Childcare Policy and Mother’s Labour Supply: Evidence Based on the Five Cycles of the NLSCY," CIRANO Project Reports 2005rp-21, CIRANO.
  5. Pierre Lefebvre & Philip Merrigan & Matthieu Verstraete, 2006. "Impact of Early Childhood Care and Education on Children's Preschool Cognitive Development: Canadian Results from a Large Quasi-experiment," Cahiers de recherche 0636, CIRPEE.
  6. Hou, Feng & Picot, Garnett & Myers, Karen & Myles, John, 2006. "Why Did Employment and Earnings Rise Among Lone Mothers During the 1980s and 1990s?," Analytical Studies Branch Research Paper Series 2006282e, Statistics Canada, Analytical Studies Branch.
  7. Pierre Lefebvre & Philip Merrigan & Matthieu Verstraete, 2008. "Childcare Policy and Cognitive Outcomes of Children: Results from a Large Scale Quasi-Experiment on Universal Childcare in Canada," Cahiers de recherche 0823, CIRPEE.
  8. Hou, Feng & Picot, Garnett & Myers, Karen & Myles, John, 2008. "The Demographic Foundations of Rising Employment and Earnings Among Single Mothers in Canada and the United States, 1980 to 2000," Analytical Studies Branch Research Paper Series 2008305e, Statistics Canada, Analytical Studies Branch.

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