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Evaluating the impact of 20 hours free early childhood education on women's labour market participation

Isabelle Bouchard (), Lydia Cheung () and Gail Pacheco ()
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Isabelle Bouchard: HEC Montreal
Lydia Cheung: School of Economics, Auckland University of Technology
Gail Pacheco: New Zealand Work Research Institute, Faculty of Business, Economics and Law, Auckland University of Technology

No 2018-05, Working Papers from Auckland University of Technology, Department of Economics

Abstract: New Zealand introduced a substantial childcare subsidy just over a decade ago, providing 20 hours free early childhood education (ECE) to all three and four year olds. We evaluate the impact of this policy shift on mothers’ labour market participation. Using a triple difference strategy and population wide administrative data, we follow mothers’ monthly wages from pre-pregnancy to six years post-childbirth. The estimated impact of the ECE reform is a drop in earnings for eligible women, by four to ten percent post-childbirth. Furthermore, most of the reduction occurs prior to the children reaching the age of eligibility. This suggests that the policy may have partially displaced private spending on ECE and that eligible mothers substituted this saving intertemporally.

Keywords: Early childhood education; triple differences; mothers' wages and salaries; intertemporal substitution; administrative data (search for similar items in EconPapers)
JEL-codes: C21 H40 J13 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lab
Date: 2018-07
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