Scandinavian Working Papers in Economics

Memorandum,
Oslo University, Department of Economics

No 24/2009: Money for Nothing? Universal Child Care and Maternal Employment

Tarjei Havnes () and Magne Mogstad ()
Additional contact information
Tarjei Havnes: Dept. of Economics, University of Oslo, Postal: Department of Economics, University of Oslo, P.O Box 1095 Blindern, N-0317 Oslo, Norway
Magne Mogstad: Statistics Norway, Postal: Postal: Pb 8131 Dep, NO-0033 Oslo, Visit: Kongens gt. 6, Norway

Abstract: The strong correlation between child care and maternal employment rates has led previous research to conclude that a ordable and readily available child care is a driving force both of cross-country di erences in maternal employment and of its rapid growth over the last decades. We analyze the introduction of subsidized, universally accessible child care in Norway. Our precise and robust di erence-in-di erences estimates reveal that there is little, if any, causal e ect of child care on maternal employment, despite a strong correlation. Instead of increasing mothers' labor supply, the new subsidized child care mostly crowds out informal child care arrangements, suggesting a signi cant net cost of the child care subsidies.

Keywords: universal child care; female labor force participation

JEL-codes: H40; J13; J21

32 pages, October 1, 2009

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Tarjei Havnes and Magne Mogstad, 'Money for Nothing? Universal Child Care and Maternal Employment', Journal of Public Economics

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