The Effect of Childcare Access on Women's Careers and Firm Performance

46 Pages Posted: 4 Aug 2022

See all articles by Elena Simintzi

Elena Simintzi

University of North Carolina Kenan-Flagler Business School; Centre for Economic Policy Research (CEPR)

Sheng-Jun Xu

University of Alberta - School of Business

Ting Xu

University of Virginia - Darden School of Business

Date Written: July 13, 2022

Abstract

We study the effect of government-subsidized childcare on women's career outcomes and firm performance using linked tax filing data. Exploiting a universal childcare reform in Quebec in 1997 and the variation in its timing relative to childbirth across cohorts of parents, we show that earlier access to childcare increases employment among new mothers, particularly among those previously unemployed. Earlier childcare access increases new mothers' reallocation of careers into more demanding jobs in male-dominated firms, leading to higher earnings and higher productivity. Firms traditionally unattractive to women with children benefit from such reallocation, experiencing higher growth and performance. Our results suggest that childcare frictions hamper women's career progression and their allocation of human capital in the labor market.

Keywords: Childcare, gender gap, earnings, productivity, labor, worker-firm match

JEL Classification: G28, G32, K22

Suggested Citation

Simintzi, Elena and Xu, Sheng-Jun and Xu, Ting, The Effect of Childcare Access on Women's Careers and Firm Performance (July 13, 2022). Available at SSRN: https://ssrn.com/abstract=4162092 or http://dx.doi.org/10.2139/ssrn.4162092

Elena Simintzi

University of North Carolina Kenan-Flagler Business School ( email )

McColl Building, Room 4200B
300 Kenan Center Drive
Chapel Hill, NC 27599-3490
United States

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

Sheng-Jun Xu

University of Alberta - School of Business ( email )

2-32D Business Building
Edmonton, Alberta T6G 2R6
Canada

Ting Xu (Contact Author)

University of Virginia - Darden School of Business ( email )

P.O. Box 6550
Charlottesville, VA 22906-6550
United States

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