Childcare and employment

Parents often report childcare costs to be a significant barrier to work, and making it easier for parents to work has been a key motivation underlying government childcare policies over the last 20 years. For a variety of reasons, the impact of cheaper or more widely available childcare on parents’ labour supply is much harder to estimate than is its impact on children’s outcomes. As a result, robust evidence of the impact of childcare on parents' employment is surprisingly limited.

Quantifying the impact of the policies that have been introduced to support childcare in England is nonetheless essential in justifying further extension of universal provision of childcare and early education in the UK. IFS has undertaken rigorous work in this area to understand how parents' labour market outcomes are affected by their children becoming eligible for free part-time nursery at the age of 3 and free full-time education at the age of 4.

Free childcare and parents’ labour supply: is more better?

| Working Paper

Despite the introduction of childcare subsidies in many countries, the cost of childcare is still thought to hinder parental employment. Many governments are considering increasing the generosity of their childcare subsidies, but the a priori effect of such a policy is ambiguous and little is known empirically about its likely impact. This paper compares the effects on parents’ labour supply of offering free part-time childcare and of expanding this offer to the whole school day in England using an empirical strategy which, unlike previous studies, exploits both date of birth discontinuities and panel data. We find that the provision of free part-time childcare has little, if any, causal impact on the labour market outcomes of mothers or fathers. Increasing the number of hours of free childcare to cover a full school day, however, leads to significant increases in the labour supply of mothers whose youngest child is eligible, with impacts emerging immediately and increasing over the months following entitlement.

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Does free childcare help parents work?

| Briefing Note

In this new work, the researchers compared what happened to the labour market outcomes of mothers and fathers as their children moved from being entitled to a free part-time nursery place (offering 15 hours of free childcare per week) to a full-time place at primary school (which effectively offers parents 30–35 hours of free childcare per week).

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Can universal preschool increase the labor supply of mothers?

| External publications

The success of universal preschool education depends crucially on the policy parameters and specific country context.

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