Association for Public Policy Analysis & Management

Along with rapid economic takeoff, education and socio-economic status of Korean women has improved. Women with bachelor’s degrees increased to 40.0% in 2015 from 1.6% in 1970, while the labor force participation rate of women aged 15 to 64 increased to 59.1% in 2017 from 51.9% in 2000. However, married women have difficulty in holding down their jobs: Statistics Korea (2014) reported that 22.4% of total married women left their work because of marriage (36.9%), childcare (29.9%), or childbirth (24.4%). This is particularly due to historical and social context of Korea, where Confucianism’s notion that care is women’s work has not changed significantly, as married women in paid employment continue to take responsibility for unpaid household works (Sung 2013). Moreover, the family-based care for child has been also emphasized as one of the central hallmarks of Confucianism. Up until the 1990s, the government recommended that family should continue to care for family members, whereas state had much weaker responsibility in social welfare areas (Moon, 2002). Due to traditional gender roles as well as the lack of formal childcare system and policies, the intergenerational relations still play an important role. According to the Korea Institute for Health and Social Affairs (2015), 25% of married couples with children received help from their parents for housework or childcare, and the percentage increased to 53% for dual earning couples. Compared to formal care, it is cheaper, trustworthier, and more flexible.

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.