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Parental labour supply responses to the abolition of day care fees

Author

Listed:
  • Huebener, Mathias
  • Pape, Astrid
  • Spiess, C. Katharina
Abstract
This paper provides evidence that low private contributions to highly subsidised day care constrain mothers from working longer hours. We study the effects of reforms that abolished day care fees in Germany on parental labour supply. The reforms removed private contributions to highly subsidised day care in the year before children enter primary school. We exploit the staggered reform across states with a difference-in-differences approach and event studies. Although participation in day care is almost universal for preschoolers, we provide evidence that the reforms increase the intensity of day care use and the working time of mothers by about 7.1 percent. Single mothers, mothers with no younger children, mothers in denser local labour markets, and highly educated mothers react most strongly. We find no evidence for labour supply responses at the extensive margin and no evidence of responses in paternal labour supply. The effects on maternal labour supply fade away by the end of primary school as mothers in the control group also gradually increase their labour supply as their children grow older.

Suggested Citation

  • Huebener, Mathias & Pape, Astrid & Spiess, C. Katharina, 2020. "Parental labour supply responses to the abolition of day care fees," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 180, pages 510-543.
    • Handle: RePEc:zbw:espost:233854
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    Cited by:

    1. Mara Barschkett, 2022. "Age-specific Effects of Early Daycare on Children's Health," Discussion Papers of DIW Berlin 2028, DIW Berlin, German Institute for Economic Research.
    2. Jonas Jessen & Christa Katharina Spieß & Sevrin Waights, 2022. "Centre‐Based Care and Parenting Activities," Oxford Bulletin of Economics and Statistics, Department of Economics, University of Oxford, vol. 84(6), pages 1356-1379, December.
    3. Fiaschi, Davide & Tealdi, Cristina, 2023. "The attachment of adult women to the Italian labour market in the shadow of COVID-19," Labour Economics, Elsevier, vol. 83(C).
    4. Eric Schuss & Mohammed Azaouagh, 2023. "The expansion of early childcare and transitions to first and second birth in Germany," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 476-507, April.
    5. Köppl-Turyna, Monika & Bittó, Virág & Graf, Nikolaus, 2022. "Effizienzpotenziale in der Kinderbetreuung in Österreich," Policy Notes 50, EcoAustria – Institute for Economic Research.
    6. Huebener, Matthias & Waights, Sevrin & Spieß, C. Katharina & Siegel, Nico A. & Wagner, Gert G., 2021. "Parental well-being in times of Covid-19 in Germany," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, vol. 19(1), pages 91-122.
    7. Hermes, Henning & Krauß, Marina & Lergetporer, Philipp & Peter, Frauke & Wiederhold, Simon, 2022. "Early child care and labor supply of lower-SES mothers: A randomized controlled trial," DICE Discussion Papers 394, Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE).
    8. Barschkett, Mara & Spieß, C. Katharina & Ziege, Elena, 2021. "Does Grandparenting Pay off for the Next Generations? Intergenerational Effects of Grandparental Care," IZA Discussion Papers 14795, Institute of Labor Economics (IZA).
    9. Selina Gangl & Martin Huber, 2021. "From homemakers to breadwinners? How mandatory kindergarten affects maternal labour market outcomes," Papers 2111.14524, arXiv.org, revised Mar 2022.
    10. Gangl, Selina & Huber, Martin, 2021. "From homemakers to breadwinners? How mandatory kindergarten affects maternal labour market attachment," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203636, Verein für Socialpolitik / German Economic Association, revised 2021.
    11. Breyer, Friedrich & Sterba, Maj-Britt, 2024. "Are taxes or user-fees more popular among politicians? The case of childcare," Working Papers 24, University of Konstanz, Cluster of Excellence "The Politics of Inequality. Perceptions, Participation and Policies".
    12. Busse, Anna & Gathmann, Christina, 2020. "Free daycare policies, family choices and child development," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 240-260.
    13. Fischer, Sandra & Glaser, Stella & Stöbe-Blossey, Sybille, 2024. "Zwischen (Rechts-)Anspruch und Realität: Soziale Selektivität in der Kindertagesförderung," IAQ-Report 2024-06, University of Duisburg-Essen, Institute for Work, Skills and Training (IAQ).
    14. Barschkett, M.; & Bosque-Mercader, L.;, 2024. "Building Health across Generations: Childbirth, Childcare and Maternal Health," Health, Econometrics and Data Group (HEDG) Working Papers 24/08, HEDG, c/o Department of Economics, University of York.
    15. Mara Barschkett, 2022. "Age-specific Effects of Early Daycare on Children’s Health," Berlin School of Economics Discussion Papers 0005, Berlin School of Economics.
    16. Barschkett, Mara, 2023. "Age-specific Effects of Early Daycare on Children's Health," VfS Annual Conference 2023 (Regensburg): Growth and the "sociale Frage" 277588, Verein für Socialpolitik / German Economic Association.

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    More about this item

    Keywords

    Labour supply; Childcare costs; Family policy; Event study;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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