Childcare availability, household structure, and maternal employment

Abstract

We estimate the causal effects of childcare availability on the maternal employment rate using prefecture panel data constructed from the Japanese quinquennial census 1990-2010. We depart from previous contributions by controlling for prefecture fixed effects, without which the estimates can be severely biased upward. We find that the treatment effect is heterogeneous: the employment rate of mothers in nuclear households increases with childcare availability, while that of mothers in three-generation households does not. We apply our estimates to decomposition of the growth of the maternal employment rate from 1990 to 2010. The decomposition indicates that the increase in childcare availability raised the maternal employment rate by about two percentage points. We also find that dissolution of three-generation household lowered the maternal employment rate. This negative effect is more strongly pronounced in small prefectures where the household structure changed dramatically.

Has Abe's Womanomics Worked?

“…Our finding of the significant effects of day care contrasts with the recent study of Asai et al (2015) who challenged many earlier studies on the effect of childcare on maternal labor supply by stating that their prefectural fixed effects model suggested that childcare provision was only a substitute for the informal care provided by grandparents and that it did not increase maternal employment in three-generation households, even though the effect was significant in nuclear households. Asai et al use prefectural Census data aggregated by family type that spans the period 1990-2010.…”

“…11 Our measurement approach departs from Asai et al (2015) or Unayama (2011), who use the number of accredited day care places for 0-6-year-old divided by the number of children in that age for the relevant prefecture. The present paper uses an index based on 2-year-olds for two reasons.…”

“…However, one might say that during the period 1995-2005, the provision of infant care in rural prefectures increased not only because it was a nationally advocated policy but also because many day care centers in the rural prefectures were faced with losing customers due to the drain of young workers to metropolitan areas. Therefore, the results of Asai et al (2015) can be interpreted as meaning that the increase of infant care in rural areas with three-generation households was more supply-led than demand-led. Our results showed the importance of provision of infant care for maternal employment in present-day Japan.…”

Effects of subsidized childcare on mothers’ labor supply under a rationing mechanism

“…However, the existing evidence for the effectiveness of childcare reforms on mothers' labor supply is mixed across time and countries. Indeed, many papers find that the effect of childcare on maternal labor supply is small and/or statistically insignificant (see Lundin, Mörk, and Öckert (2008), Cascio (2009), Goux and Maurin (2010), Fitzpatrick (2010Fitzpatrick ( , 2012, Havnes and Mogstad (2011) and Asai, Kambayashi, and Yamaguchi (2015)). …”

Comment on “Availability of Long-term Care Facilities and Middle-aged People's Labor Supply in Japan”

“…Since the data from these surveys provide limited information regarding the caregiving activities of middle-aged people, Kondo (2017) addresses this issue by considering the availability of long-term care facilities in prefectures and medical districts to be a proxy for an individual's unlikelihood of caring for his/her frail elderly parents. This method is similar to that of Asai et al (2015) who use prefecture-level data to study the relationship between the capacity of child-care centers and the labor market participation of mothers. Kondo (2017) concludes that the availability of long-term care facilities is unrelated to the labor market participation of middle-aged men and women.…”