Effects of Subsidized Childcare on Mothers’ Labor Supply Under a Rationing Mechanism*

McMaster University, DEPARTMENT OF ECONOMICS, WORKING PAPER SERIES 2017-06

47 Pages Posted: 28 Apr 2017

See all articles by Shintaro Yamaguchi

Shintaro Yamaguchi

University of Tokyo - Graduate School of Economics

Yukiko Asai

University of Tokyo - Institute of Social Science

Ryo Kambayashi

Hitotsubashi University

Date Written: April 18, 2017

Abstract

We estimate the marginal treatment effect of childcare use on mothers’ labor market outcomes by exploiting a staggered childcare expansion across regions in Japan. The estimates show that the treatment effect is negatively associated with propensity to use childcare, which implies that mothers who increase their labor supply more are less likely to use childcare. Negative selection into treatment arises, because the childcare rationing rule gives preferential treatment to mothers working full-time before childcare application. These mothers are strongly attached to the labor market and likely to work regardless of the availability of subsidized childcare.

Keywords: childcare, labour market, Japan, treatment effect

JEL Classification: H4, J2

Suggested Citation

Yamaguchi, Shintaro and Asai, Yukiko and Kambayashi, Ryo, Effects of Subsidized Childcare on Mothers’ Labor Supply Under a Rationing Mechanism* (April 18, 2017). McMaster University, DEPARTMENT OF ECONOMICS, WORKING PAPER SERIES 2017-06 . Available at SSRN: https://ssrn.com/abstract=2960219 or http://dx.doi.org/10.2139/ssrn.2960219

Shintaro Yamaguchi (Contact Author)

University of Tokyo - Graduate School of Economics ( email )

Tokyo
Japan

Yukiko Asai

University of Tokyo - Institute of Social Science ( email )

Hongo 7-3-1
Tokyo, TOKYO 113-0033
Japan

Ryo Kambayashi

Hitotsubashi University ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8601
Japan

HOME PAGE: http://www.ier.hit-u.ac.jp/English/faculty/kambayashi.html

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