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How Successful Are Childcare Subsidy Reforms in Promoting Childcare Usage and Maternal Employment in Australia?

Author

Listed:
  • Doan, Lina

    (Monash University)

Abstract

Although it is widely believed that expanding childcare subsidies can increase maternal labour force participation, evidence on the effectiveness of such policies in the Australian context remains limited. We provide new evidence on this relationship using a difference- in-differences approach, leveraging rich Australian panel data and the increase in childcare subsidies introduced by the 2022 Child Care Subsidy (CCS) reform. Our findings show that formal childcare participation and hours of usage increased significantly following the reform; however, there are no robust or significant effects on maternal labour supply, either on the extensive or intensive margin. These results align with a recent body of research suggesting that while childcare subsidies can substantially increase childcare utilisation, their effects on maternal employment are often limited or context-dependent.

Suggested Citation

  • Doan, Lina, 2026. "How Successful Are Childcare Subsidy Reforms in Promoting Childcare Usage and Maternal Employment in Australia?," Warwick-Monash Economics Student Papers 100, Warwick Monash Economics Student Papers.
    • Handle: RePEc:wrk:wrkesp:100
    as

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    File URL: https://warwick.ac.uk/fac/soc/economics/research/wmesp/manage/100-doan.pdf
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    References listed on IDEAS

    as
    1. Anu Rammohan & Stephen Whelan, 2007. "The Impact Of Childcare Costs On The Full‐Time/Part‐Time Employment Decisions Of Australian Mothers," Australian Economic Papers, Wiley Blackwell, vol. 46(2), pages 152-169, June.
    2. Guyonne Kalb & Wang‐Sheng Lee, 2008. "Childcare Use And Parents’ Labour Supply In Australia," Australian Economic Papers, Wiley Blackwell, vol. 47(3), pages 272-295, September.
    3. Michael Baker & Derek Messacar & Mark Stabile, 2023. "Effects of Child Tax Benefits on Poverty and Labor Supply: Evidence from the Canada Child Benefit and Universal Child Care Benefit," Journal of Labor Economics, University of Chicago Press, vol. 41(4), pages 1129-1182.
    4. Robert Breunig & Xiaodong Gong & Anthony King, 2012. "Partnered Women's Labour Supply and Child‐Care Costs in Australia: Measurement Error and the Child‐Care Price," The Economic Record, The Economic Society of Australia, vol. 88(s1), pages 51-69, June.
    5. Rachel Connelly & Jean Kimmel, 2003. "The Effect of Child Care Costs on the Employment and Welfare Recipiency of Single Mothers," Southern Economic Journal, John Wiley & Sons, vol. 69(3), pages 498-519, January.
    6. Rachel Connelly & Jean Kimmel, 2003. "The Effect of Child Care Costs on the Employment and Welfare Recipiency of Single Mothers," Southern Economic Journal, Southern Economic Association, vol. 69(3), pages 498-519, January.
    7. Pierre Lefebvre & Philip Merrigan, 2008. "Child-Care Policy and the Labor Supply of Mothers with Young Children: A Natural Experiment from Canada," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 519-548, July.
    Full references (including those not matched with items on IDEAS)

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    Keywords

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    JEL classification:

    • 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
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models

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