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Childcare and Maternal Labor Supply – a Cross-Country Analysis of Quasi-Experimental Estimates from 7 Countries

Author

Listed:
  • Agnes Szabo-Morvai

    (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and HETFA Institute)

  • Anna Lovasz

    (Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences and ELTE University)

Abstract

Evidence from single country studies suggests that the effect of subsidized childcare availability on maternal labor supply varies greatly by institutional context. We provide estimates of the childcare effect around age 3 of children for 7 EU countries, based on harmonized data and the same quasi-experimental methodology, and evaluate their cross-country variation in light of key institutional factors (leave policies, labor market characteristics, cultural norms). The identification of the childcare effect utilizes birthdate-based kindergarten eligibility cutoffs specific to each country in an instrumental variables approach. We combine data on mothers from the EU-LFS, eligibility cutoffs gathered from country experts and verified using further datasets, and country-level institutional characteristics from various sources. We discuss the role of the context, timing, and the point of estimation. The results suggest that the childcare effect is the highest in CEE countries, where at this child age, maternal participation is still relatively low compared to that of mothers with older children, and leaves with job protection are just ending. We find less evidence of an impact in Southern EU countries, where leaves end at a much earlier age, and maternal participation at older child ages is low. Western EU countries also show some impact, despite the already high maternal participation rates prior to this age. Specific policy implications are derived from the results in light of the EU Barcelona targets for childcare expansion under age 3.

Suggested Citation

  • Agnes Szabo-Morvai & Anna Lovasz, 2017. "Childcare and Maternal Labor Supply – a Cross-Country Analysis of Quasi-Experimental Estimates from 7 Countries," Budapest Working Papers on the Labour Market 1703, Institute of Economics, Centre for Economic and Regional Studies.
  • Handle: RePEc:has:bworkp:1703
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    References listed on IDEAS

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    More about this item

    Keywords

    subsidized childcare; maternal labor supply; institutional context;
    All these keywords.

    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
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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