Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/200781 
Authors: 
Year of Publication: 
2016
Citation: 
[Journal:] KDI Journal of Economic Policy [ISSN:] 2586-4130 [Volume:] 38 [Issue:] 1 [Publisher:] Korea Development Institute (KDI) [Place:] Sejong [Year:] 2016 [Pages:] 1-22
Publisher: 
Korea Development Institute (KDI), Sejong
Abstract: 
This paper examines the effects of a universal childcare subsidy on childcare decisions and mothers' employment by using Korea's policy reform of 2012, which provided a full childcare subsidy to all children aged 0 to 2. I find that the introduction of a universal childcare subsidy increased the use of childcare centers by children aged 0-2, which led to less maternal care compared to that provided to children aged 3-4. However, the expanded subsidy had little effect on mothers' labor supply. Moreover, the policy effects vary by individual and household characteristics. The effects of the expanded subsidy are mainly found in low-income households and less educated mothers. Highly educated mothers and high-income households are likely to focus more on the quality of childcare service. These results imply that a simple reduction in childcare costs would bring only limited effects on mothers' time allocation behavior; thus, more attention should be paid to improving the quality of childcare services.
Subjects: 
Universal childcare
Childcare subsidy
Quality of care
Mothers' time allocation
JEL: 
J13
J21
J22
I28
Persistent Identifier of the first edition: 
Creative Commons License: 
cc-by-sa Logo
Document Type: 
Article

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