Who Benefits from Cash†for†Care? Effects of a Home Care Subsidy on Maternal Employment, Childcare Choices, and Children’s Development

Matthias Collischon, Daniel Kuehnle and Michael Oberfichtner

Journal of Human Resources, 2024, vol. 59, issue 4, 1011-1051

Abstract: We provide comprehensive evidence on Germany’s home care subsidy for one†and two†year†old children. In West Germany, take†up was 60 percent, and the subsidy reduced mothers’ probability to work within three years after childbirth by 1.4 percentage points and increased exclusive parental care by 6.5 percentage points. The subsidy improved children’s development at age six, with the exception of children who do not speak German at home. In East Germany, 30 percent of families used the subsidy, neither affecting maternal employment nor exclusive parental care. As an income transfer, the subsidy did not benefit families with the least economic resources most.

JEL-codes: J13 J18 J22 (search for similar items in EconPapers)
Date: 2024
Note: DOI: https://doi.org/10.3368/jhr.0720-11051R1
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Persistent link: https://EconPapers.repec.org/RePEc:uwp:jhriss:v:59:y:2024:i:4:p:1011-1051

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