Does Free Pre-school Childcare Increase Parental Employment?

Using an extensive expansion of pre-school childcare in Wales in 2019 this paper explores whether access to free childcare increases parental employment. Our analysis is based on two alternative identification strategies applied to rich household data from the Annual Population Survey. First, we use a regression discontinuity design to exploit eligibility cutoffs based on the child’s date of birth. Second, we apply a staggered difference-in-differences approach leveraging the phased spatial rollout of the policy during its trial period. We find no evidence of an impact of free pre-school childcare on parental employment using either approach. Moreover, this is true for mothers, parents with relatively low education and for parents whose youngest child is eligible, where more pronounced effects might be anticipated. Our evidence therefore questions the effectiveness of the policy in increasing parental employment.