Money for Nothing? Universal Child Care and Maternal Employment

Tarjei Havnes and Magne Mogstad

No 4504, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: The strong correlation between child care and maternal employment rates has led previous research to conclude that affordable and readily available child care is a driving force both of cross-country differences in maternal employment and of its rapid growth over the last decades. We analyze the introduction of subsidized, universally accessible child care in Norway. Our precise and robust difference-in-differences estimates reveal that there is little, if any, causal effect of child care on maternal employment, despite a strong correlation. Instead of increasing mothers’ labor supply, the new subsidized child care mostly crowds out informal child care arrangements, suggesting a significant net cost of the child care subsidies.

Keywords: female labor force participation; universal child care (search for similar items in EconPapers)
JEL-codes: H40 J13 J21 (search for similar items in EconPapers)
Pages: 32 pages
Date: 2009-10
New Economics Papers: this item is included in nep-lab
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Citations: View citations in EconPapers (18)

Published - published in: Journal of Public Economics, 2011, 95 (11-12), 1455-1465

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Related works:
Journal Article: Money for nothing? Universal child care and maternal employment (2011)
Working Paper: Money for Nothing? Universal Child Care and Maternal Employment (2009)
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