Female Employment and Pre-Kindergarten: On the Unintended Effects of an Italian Reform

56 Pages Posted: 27 Jan 2016

Date Written: September 22, 2015

Abstract

We theoretically show that when mothers need to buy childcare services not only if they work but also if they want to search actively for a job, a reduction in the price of childcare will increase their likelihood of searching but may decrease their willingness to accept a job offer and therefore lower employment. We test these predictions empirically by means of a Regression Discontinuity design and find that the introduction in Italy of pre-kindergarten, a much cheaper alternative to day care for 2-year-old children, increased both participation in the labour market and employment of mothers of eligible children. This effect was driven largely by a significant decrease in the stated reservation wage.

Keywords: childcare, female labour supply, public services

JEL Classification: J13, J16, H41

Suggested Citation

Carta, Francesca and Rizzica, Lucia, Female Employment and Pre-Kindergarten: On the Unintended Effects of an Italian Reform (September 22, 2015). Bank of Italy Temi di Discussione (Working Paper) No. 1030, Available at SSRN: https://ssrn.com/abstract=2722504 or http://dx.doi.org/10.2139/ssrn.2722504

Francesca Carta

Bank of Italy ( email )

Via Nazionale 91
Rome, 00184
Italy

Lucia Rizzica (Contact Author)

Bank of Italy ( email )

Via Milano, 64
00184 Rome
Italy

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