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Childcare, Labor Supply, and Business Development: Experimental Evidence from Uganda

Author

Listed:
  • Kjetil Bjorvatn
  • Denise Ferris
  • Selim Gulesci
  • Arne Nasgowitz
  • Vincent Somville
  • Lore Vandewalle

Abstract

We randomly offered a childcare subsidy, an equivalent cash grant, or both to mothers of three-to-five-year-old children. The childcare subsidy substantially increased the labor supply and earnings of single mothers, highlighting the importance of time constraints for them. Among couples, childcare did not affect mothers' labor market outcomes but instead increased fathers' salaried employment. At the household level, childcare led to higher income and consumption and improved child development. Cash grants positively affected mothers' labor supply and income irrespective of the household structure, suggesting the general importance of credit constraints for women's business development.

Suggested Citation

  • Kjetil Bjorvatn & Denise Ferris & Selim Gulesci & Arne Nasgowitz & Vincent Somville & Lore Vandewalle, 2025. "Childcare, Labor Supply, and Business Development: Experimental Evidence from Uganda," American Economic Journal: Applied Economics, American Economic Association, vol. 17(2), pages 75-101, April.
    • Handle: RePEc:aea:aejapp:v:17:y:2025:i:2:p:75-101
    DOI: 10.1257/app.20230227
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    More about this item

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O12 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development

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