Unintended Consequences of Childcare Regulation in Chile: Evidence from a Regression Discontinuity Design

Mauricio Villena, Rafael Sanchez and Eugenio Rojas

MPRA Paper from University Library of Munich, Germany

Abstract: In several countries governments fund childcare provision, but in many others it is privately funded as labour regulation mandates that firms have to provide childcare services. For this latter case, there is no empirical evidence on the effects generated by the financial burden of childcare provision. In particular, there is no evidence about who effectively pays (i.e. firms or employees) and how it pays (i.e. via wages and/or employment). This study is the first one to provide such evidence. Our hypothesis is that, in imperfect labour markets (e.g. oligopsonistic), firms will transfer childcare cost on to their workers. To analyze this, we exploit a discontinuity on childcare provision mandated by Chilean labour regulation. Our results suggest that firms transfer entirely the cost of childcare (nearly 100%) to their workers via lower wages (not only to female but also to male workers) and not through the alteration of the share of male workers within the firm. This is consistent with our finding that firms do not manipulate the threshold (number of female workers) because they avoid the burden by transfering the cost to their employees.

Keywords: Childcare; Labour Regulation; Labour Tax; Gender; Female workers. (search for similar items in EconPapers)
JEL-codes: H3 H32 J0 J08 J1 J13 J18 J3 J33 J4 J42 J8 (search for similar items in EconPapers)
Date: 2011-11-21, Revised 2015-02-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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