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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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Author Info

  • Pierre Lefebvre
  • Philip Merrigan

Abstract

On September 1st, 1997, a new childcare policy was initiated by the provincial government of Quebec, the second most populous province in Canada. Childcare services licensed by the Ministry of the Family (not-for-profit centres, family-based childcare, and for-profit centres under the agreement) began offering day care spaces at the reduced parental contribution of $5 per day child for children aged 4 years. In successive years, 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 childcare spaces. By September 2000, the low-fee policy applied to all children aged 0 to 59 months (not in kindergarten) and the number of partly subsidized spaces increased from 77,000 in 1998 to 163,000 spaces, totally subsidized by the end of year 2002, while the number of eligible children, zero to four years old, declined from 428,000 to 369,000 over the same period. Using annual data (1993 to 2002), drawn from Statistics Canada's Suvey of Labour and Income Dynamics (SLID), this study attempts to estimate the effect of the policy on the labor supply behavior of Quebec mothers with pre-school children, aged from 0 to 5 years old. The analysis examines the impact of the policy on the following outcomes: labor force participation, annual number of weeks and hours at work, annual earned income and whether the job was full-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 econometrics results support the hypothesis that the childcare policy, together with the transformation of public kindergarten from a part-time to a full-time basis, had a large and statistically significant impact on the labor supply of Quebec's mothers with pre-school children. The estimates also suggest, though less convincingly, that the size of the impact increased concurrently with the positive growth in the number of low-fee spaces.

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Bibliographic Info

Paper provided by CIRPEE in its series Cahiers de recherche with number 0508.

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Date of creation: 2005
Date of revision:
Handle: RePEc:lvl:lacicr:0508

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Keywords: Mother's labor supply; preschool children; childcare subsidy; natural experiment;

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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 & 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.
  5. 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.
  6. 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.
  7. 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.
  8. 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.

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