The Effect of Child Care Centre Openings on Child Care Arrangements and Maternal Labour Supply

Chikako Yamauchi, Australian National University

This study investigates how new child care centre openings affect child care arrangements and maternal labour supply. The results show that centre openings induce a substitution toward centre-based care, away from home-based and informal care. This is accompanied by reductions in overall non-parental care usage and mothers’ work, suggesting an increase in maternal care duties associated with the shift toward centre-based care. These results imply that, unlike the introduction of subsidised childcare, increasing centre availability only is likely to have a limited impact on maternal labour supply. While it may broaden childcare options, it is likely to disproportionately benefit relatively educated mothers, who demonstrate a particularly strong response. These findings are not driven by endogenous household migration, and are unlikely to be solely caused by endogenous centre entry.