Does Grandparental Childcare Increase Maternal Employment? Evidence from South Korea
*Names in bold indicate Presenter
Despite its prevalence, surprisingly little research has been done on the childcare services provided by grandparents. In particular, none of literature has investigated how much it increases the probability of Korean mothers to work. As a result, the grandparents' contribution is underestimated and they are often not compensated financially, while the country lacks established policies that support intergenerational time transfers. Only a few studies in the Western countries have recently started to use econometric methods to see the casual effects of intergenerational links on mother’s employment (Aassve, et al., 2012; Albuquerque & Passos, 2010; Compton & Pollak, 2013; Posadas & Vidal-Fernandez, 2013).
To suggest evidence-based childcare policies that enable mothers to work, the paper fills the gap in the literature by examining the effects of grandparental childcare on employment status of married women with young children, using data from the Korean Longitudinal Survey of Women and Families. To tackle endogeneity problem, the paper uses an instrumental variable approach with a bivariate probit model (Dimova & Wolff, 2008). The geographical distance between grandparents’ and women’s home multiplied by cost is an instrument variable to exogenously estimate the probability of using grandparental childcare (Compton & Pollak, 2013). The paper finds the evidence that childcare transfers from grandparents significantly increase the probability of mothers to participate in the labor market. The result suggests that the government should establish family-friendly policies to support and encourage grandparental childcare such as subsidies and educational programs.