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Effects of Subsidized Childcare on Mothers’ Labor Supply Under a Rationing Mechanism

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  • Yamaguchi, Shintaro
  • Asai, Yukiko
  • Kambayashi, Ryo

Abstract

We estimate the marginal treatment effect of childcare use on mothers’ labor market outcomes by exploiting a staggered childcare expansion across regions in Japan. The estimates show that the treatment effect is negatively associated with propensity to use childcare, which implies that mothers who increase their labor supply more are less likely to use childcare. Negative selection into treatment arises, because the childcare rationing rule gives preferential treatment to mothers working full-time before childcare application. These mothers are strongly attached to the labor market and likely to work regardless of the availability of subsidized childcare.

Suggested Citation

  • Yamaguchi, Shintaro & Asai, Yukiko & Kambayashi, Ryo, 2017. "Effects of Subsidized Childcare on Mothers’ Labor Supply Under a Rationing Mechanism," Discussion Paper Series 658, Institute of Economic Research, Hitotsubashi University.
    • Handle: RePEc:hit:hituec:658
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    References listed on IDEAS

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    Cited by:

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    2. Brewer, Mike & Cattan, Sarah & Crawford, Claire & Rabe, Birgitta, 2022. "Does more free childcare help parents work more?," Labour Economics, Elsevier, vol. 74(C).
    3. LIU Yang & HAGIWARA Risa, 2023. "Female Labor Force Participation in Japan: An epidemiological approach using native and immigrant data," Discussion papers 23023, Research Institute of Economy, Trade and Industry (RIETI).
    4. KONDO Ayako, 2024. "Subtle Completed Fertility Recovery in Cohorts Who Entered the Labor Market during the Deep Recession in Japan," Discussion papers 24063, Research Institute of Economy, Trade and Industry (RIETI).
    5. Akabayashi, Hideo & Ruberg, Tim & Shikishima, Chizuru & Yamashita, Jun, 2023. "Education-oriented and care-oriented preschools: Implications on child development," Labour Economics, Elsevier, vol. 84(C).
    6. Eric Schuss & Mohammed Azaouagh, 2021. "Combining parenthood and work: transmission channels and heterogeneous returns to early public childcare," Review of Economics of the Household, Springer, vol. 19(3), pages 641-676, September.
    7. Fukai, Taiyo & Kondo, Ayako, 2024. "Access to Formal Childcare for Toddlers and Parental Employment and Earnings," IZA Discussion Papers 16880, Institute of Labor Economics (IZA).
    8. Pierre Pora, 2020. "Keep Working and Spend Less? Collective Childcare and Parental Earnings in France," Working Papers hal-04159681, HAL.
    9. Daiji Kawaguchi & Keisuke Kawata & Takahiro Toriyabe, 2021. "An Assessment of Abenomics from the Labor Market Perspective," Asian Economic Policy Review, Japan Center for Economic Research, vol. 16(2), pages 247-278, July.
    10. Zhang, Chi & Managi, Shunsuke, 2021. "Childcare availability and maternal employment: New evidence from Japan," Economic Analysis and Policy, Elsevier, vol. 69(C), pages 83-105.
    11. HAGIWARA Risa & LIU Yang, 2023. "Work-life Conflicts of Native and Immigrant Women in Japan," Discussion papers 23056, Research Institute of Economy, Trade and Industry (RIETI).
    12. Eiji Yamamura, 2021. "Do You Want Sustainable Olympics? Environment, Disaster, Gender, and the 2020 Tokyo Olympics," Sustainability, MDPI, vol. 13(22), pages 1-14, November.
    13. Zhang, Chi & Managi, Shunsuke, 2020. "Functional social support and maternal stress: A study on the 2017 paid parental leave reform in Japan," Economic Analysis and Policy, Elsevier, vol. 65(C), pages 153-172.

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    JEL classification:

    • H4 - Public Economics - - Publicly Provided Goods
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor

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