Panel Paper: Does Market-Based Childcare Encourage Work? the Role of Childcare Costs on the Employment Behavior of Mothers

Saturday, November 8, 2014 : 3:50 PM
Nambe (Convention Center)

*Names in bold indicate Presenter

Lindsay Flynn, University of Virginia
Do institutionally codified childcare arrangements affect decisions regarding work and family? Specifically, are mothers more likely to work (and more likely to work more) when formal or subsidized care is readily available, or can market-based childcare act as a substitute?   Private, or market-based care is often omitted from research.  This is partly due to current data limitations, and the difficulty of teasing out the costs of various types of care, but also because market-based care is typically viewed as less reliable and more variable in quality compared to other forms of care.  Yet, market-based care may nonetheless serve as a potential avenue to mothers wishing to reconcile work and family obligations.  

I examine maternal employment behavior across eighteen OECD countries and estimate the effect that various childcare configurations have on labor market participation.  Survey data on maternal employment is drawn from the harmonized Luxembourg Income Study database, and combined with measures of childcare affordability and use at the country level using OECD estimates.  Through an analysis based on OLS and logistic regressions, I find that market-based childcare serves as a substitute for public care in boosting maternal employment rates.  Furthermore, the intensity with which women work (as measured by hours worked) is also influenced by the presence of market-based care.  The role of private childcare is not just important in the United States, but its presence or absence is seemingly important across a large group of countries.  I conclude with a discussion of the substantive implications of this finding, and a call for the development of additional measures of care which focus on the affordability of care, regardless of care type.