Life-Cycle Effects of Public Childcare: Evidence on Children and Their Parents

Mikko Silliman () and Mäkinen, Juuso
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Mikko Silliman: Aalto University
Mäkinen, Juuso: Ministry of Finance

No 19055, IZA Discussion Papers from IZA Network @ LISER

Abstract: This paper provides large-scale evidence linking the economic effects of childcare programs to skills measured in adulthood. We examine Finland's first national public childcare program, and document that it increased parental labor supply ---through retirement--- and improved the adult outcomes of children from poor families, while having muted or negative effects on children higher up in the income distribution. Critically, we leverage Finnish Defence Forces data on the near universe of males to show that the pattern of effects on children's long-term outcomes is underlied by lasting effects on social competence. Further, we find that the magnitude of treatment effects on parental earnings increases with work experience. Due to this dual production of human capital for parents and not just children, we show that life-cycle cost-effectiveness estimates based on the assumption of constant effects underestimate the fiscal benefits of the program.

Keywords: early childhood; social skills; parental labor supply (search for similar items in EconPapers)
JEL-codes: I24 J08 J24 (search for similar items in EconPapers)
Date: 2026-10
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Persistent link: https://EconPapers.repec.org/RePEc:iza:izadps:dp19055

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