14th journées Louis-André Gérard-Varet

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Female employment and pre-kindergarten: on the unintended effects of an Italian reform
Francesca Carta, Lucia Rizzica

Last modified: 2015-03-11

Abstract


This paper investigates the relationship between the availability of low cost childcare services and maternal labour supply in Italy. By means of a job search model we show that, when market child care is needed both when looking for a job and when working, a price reduction of childcare boosts maternal labour market participation, but has an ambiguous effect on the reservation wage and, thus on the probability of being employed. Exploiting the discontinuity in the rule that determines children's eligibility to pre-kindergarten in Italy, we test the predictions of our model and evaluate the effects of a policy reform which expanded access to kindergarten using first a Sharp Regression Discontinuity design and then a Difference in Discontinuities approach. Our results show that the possibility of anticipating the child's entry to kindergarten, a much cheaper alternative to daycare, increased both participation in the labour market and the employment probability of mothers. We show that the latter effect is largely driven by a decrease in the stated reservation wage.


Keywords


Childcare, Female Labour Supply, Public Services