Public Child Care and Mothers’ Labor Supply – Evidence from Two Quasi-Experiments

Abstract

Public child care provision should reconcile work and family life. Yet, empirical evidence for the relevance of public child care for maternal employment is ambiguous. We exploit the introduction of a legal claim to a place in kindergarten in Germany, which was contingent on month-of-birth cut-off dates and resulted in a marked increase in kindergarten attendance of three year olds in the following years. Instrumental variable and difference-in-differences estimations on two individual level data sets yield large and positive effects of public child care on maternal employment. A set of placebo treatment tests corroborate the validity of our identification strategies.