How Successful Are Childcare Subsidy Reforms in Promoting Childcare Usage and Maternal Employment in Australia?

Lina Doan
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Lina Doan: Monash University

Warwick-Monash Economics Student Papers from Warwick Monash Economics Student Papers

Abstract: Although it is widely believed that expanding childcare subsidies can increase maternal labour force participation, evidence on the effectiveness of such policies in the Australian context remains limited. We provide new evidence on this relationship using a difference- in-differences approach, leveraging rich Australian panel data and the increase in childcare subsidies introduced by the 2022 Child Care Subsidy (CCS) reform. Our findings show that formal childcare participation and hours of usage increased significantly following the reform; however, there are no robust or significant effects on maternal labour supply, either on the extensive or intensive margin. These results align with a recent body of research suggesting that while childcare subsidies can substantially increase childcare utilisation, their effects on maternal employment are often limited or context-dependent.

Keywords: Child Care Subsidy; Maternal Employment; Childcare Usage; Difference-in-Differences; Australia. JEL classifications: J13; J22; I38; C21 (search for similar items in EconPapers)
Date: 2026
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