Public childcare - its impact on gender equality in entrepreneurship revisited

Objectives: The aim of this paper is to analyze the impact of public childcare provision on women's and men's start-up rates in Germany. Going beyond previous studies, we also analyze its impact on the extent of the gender gap in start-up rates. Literature review: The current state of research indicates that public childcare provision generally reduces women's startup propensity. However, recent studies suggest that the relationship between public childcare provision and women' start-up propensity is not that clear-cut. It rather depends on the age group childcare is provided for. As the evidence regarding public childcare's impact on men's start-up propensity is mixed, it is unclear whether public childcare contributes to closing the gender gap in entrepreneurial activities. Approach/Method: We analyze the impact of public childcare provision on the start-up rate of women and men, as well as its impact on the corresponding Gender Parity Score (GPS) at a regional level. To do this, we generated a database based on public statistics covering the years 2012 up to 2018 and estimated Fixed Effect models. Results/Findings: Our results show that the effect of public childcare provision on women's and men's start-up propensity depends on the type of the venture and the age group the childcare is provided for. Moreover, public childcare affects women's and men's start-up propensity differently. All in all, public childcare provision decreases the GPS, indicating a widening of the gender gap. Implications and Value: As important as public childcare provision for women's general labor market participation is, it does neither improve their start-up propensity (quite the contrary) nor contribute to closing the entrepreneurial gender gap generally. Thus, public childcare provision seems not to be a policy for reducing the gender gap in entrepreneurship, apart from establishing economically substantial businesses.