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

48 Pages Posted: 4 Aug 2022 Last revised: 4 Oct 2023

See all articles by Elena Simintzi

Elena Simintzi

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

Sheng-Jun Xu

University of Alberta - School of Business

Ting Xu

University of Toronto, Rotman School of Management

Date Written: October 3, 2023

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 across firms, leading to higher earnings and higher productivity. Firms traditionally unattractive to mothers with young children benefited from the reform, drawing more young female workers and experiencing better 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 (October 3, 2023). Kenan Institute of Private Enterprise Research Paper No. 4162092, Available at SSRN: https://ssrn.com/abstract=4162092 or http://dx.doi.org/10.2139/ssrn.4162092

Elena Simintzi

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

University of North Carolina (UNC) at Chapel Hill - Kenan-Flagler Business School ( email )

McColl Building
Chapel Hill, NC 27599-3490
United States

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 Toronto, Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

HOME PAGE: http://https://sites.google.com/site/tingxu4

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