The effect of universal child benefits on labour supply

Using a difference-in-differences estimator, I find the Canadian Universal Child Care Benefit has significant negative income effects on the labour supply of married individuals. The likelihood of lower-educated mothers to participate in the labour force is reduced 3.2 percentage points when receiving the benefit. Median hours worked per week among lower-educated mothers is reduced by 1.9 hours. The effects on higher-educated mothers are substantial, with median hours worked among higher-educated mothers reduced by nearly one hour per week. For men, the evidence suggests small but significant income effects on labour supply, consistent with the literature on labour supply elasticities.