JESS Seminar: Public Child Care Expansion and Mother’s Labour Supply- Evidence from Norway

This study investigates whether the expansion of childcare leads to an increase in female labor supply. We measure the effect both at the intensive margin and at the extensive margin. We exploit the regional variation of the expansion of childcare for the 1-2 years olds in Norway following the childcare expansion reform in 2002. The paper makes a contribution to the literature in three respects: First, previous studies, particularly for Norway, suggest very small if not none female labor supply effects at the extensive margin through programs targeting 3-6 years old children. It remains the question whether these results extend to programs for the 1 to 2 years old. Second, we document quantatively large positive effects at the intensive margin. We show that these are mainly driven by mothers who are in lower part of the working hours distribution. Our analysis reveals that the effects are heterogeneous across demographic groups. Mothers without maternity leave adjust their contracted working hours, while mothers on maternity leave adjust their actual working hours.