Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/242561 
Year of Publication: 
2018
Series/Report no.: 
Economics Working Paper Series No. 2018/05
Publisher: 
Auckland University of Technology (AUT), Faculty of Business, Economics and Law, Auckland
Abstract: 
New Zealand introduced a substantial childcare subsidy just over a decade ago, providing 20 hours free early childhood education (ECE) to all three- and four-year-olds. We evaluate the impact of this policy shift on mothers' labour market participation and earnings. Using a difference-in-differences strategy and population-wide administrative panel data, we follow mothers' quarterly earnings from pre-pregnancy to six years post-childbirth. The estimated impact of the ECE reform varies depending on the number of children eligible. For mothers with one child, there is some evidence of a drop in labour market participation and earnings, which potentially indicates this group is using the savings in ECE expenditure, a gain in real income, to consume more non-work time. For mothers with two eligible children, there is an increase in labour market participation, potentially because these households find it more worthwhile to increase ECE consumption and return to work when there are two children who benefit from the policy.
Subjects: 
Early childhood education
difference-in-differences
mothers' earnings
intertemporal substitution
administrative data
JEL: 
C21
H40
J13
J22
Document Type: 
Working Paper

Files in This Item:
File
Size





Items in EconStor are protected by copyright, with all rights reserved, unless otherwise indicated.