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Investing in Mothers? The Long-Run Impact of a Universal Child Care Program on Maternal Work and Income
Hraness cites a source capture. The source author remains the source.
gist
Baker, Gruber, and Milligan measure Quebec’s universal subsidized child care over the maternal life cycle, not just the preschool years. Employment gains endure after children leave care; long-run earnings effects grow to about twice the participation effect via more hours, higher wages, and some occupational upgrading. Tax remittances rise and social-assistance and EI receipts fall, so the net present value of fiscal benefits may recapture 75 to 117 percent of upfront program costs.
ideas
- Child care effects do not stop at school entry. Mothers’ employment stays higher long after children age out of preschool care, so short-run labor-supply studies understate the program’s career impact.
- Earnings grow faster than participation. The long-run earnings effect becomes about twice the participation effect because intensity of work and hourly wages rise over time, not only because more mothers work.
- Early work compounds. Initial investments in labor-force attachment appear to have multiplier effects later in women’s careers, including within-occupation experience returns and some occupational upgrading.
- Fiscal payback is back-loaded but large. Higher tax remittances and lower social-program receipts can offset 75 to 117 percent of upfront child-care costs in present value, depending on the discount rate.
quotes
“We find an enduring positive impact on mothers’ employment long after children have aged out of the preschool years.”
“There is also a long-run impact on earnings which grows to be twice as large as the participation effect.”
“suggesting that initial investments in work have multiplier effects later in women’s careers.”
“the net present value of the flow of fiscal benefits may recapture between 75 and 117 percent of the upfront costs of the program.”