From August 2013, every child in Germany who has reached his or her first birthday will have a legal right to a place in a childcare facility or family day care. What effects does this have on the mothers' economic activity and child development? Our findings show that the legal entitlement to this type of formal care is expected to lead to an increase in mothers' gainful employment of up to two percentage points in the short term. The share of younger children in state-funded educational and childcare facilities will also rise by around two percentage points. In the short and medium term, using a childcare facility at an earlier age can also have a positive impact on a child's development. This applies to both the everyday skills of children aged two to three and the socio-emotional behavior of elementary school students from families with a low income or from large families.