Childcare vouchers raise work rate of mums: Liser


unsplash-logoAlexander Dummer 

Luxembourg’s subsidised childcare scheme has increased the number of women in work and the amount of time mothers spend working, recent research has indicated.

The effect was more pronounced among mums with children under 3 years old.

“The employment rate of mothers increased by 4-7 percentage points and their hours of work by around 3 hours per week,” Audrey Bousselin at the Luxembourg Institute of Socio-Economic Research wrote in a working paper released earlier this month.

“Parents whose youngest child is under the age of 3 are found to use more daycare services, for longer hours, while the use of informal care remains unchanged,” according to Bousselin.

In the working paper, Bousselin explained the programme’s path:

“In 2009, the government introduced a childcare voucher. The childcare voucher is universal: all children under 13 years old are eligible, regardless of family’s income and parent’s job. The childcare voucher aimed at increasing the use of formal childcare (including before and after school care), helping parents to find a work-life balance and reducing socio-economic inequalities between children. The childcare voucher reform increased government’s subsidies to childcare facilities. New providers entered the market, increasing the overall provision of subsidised childcare: the number of slots doubled between 2009 and 2014”.

Under the childcare voucher system, the number of “mothers whose youngest children are under 3 years old” in the workforce rose 4 percentage points. “The incidence of part-time work” increased by 7 percentage points.

The impact was greater for “more vulnerable mothers”, meaning those with lower educational levels, migrant backgrounds and single parents.

Bousselin stated:

“The results show a positive impact of the reform on the hours of daycare, which increased by almost 3 hours per week....

“After the reform, parents of children under the age of three are thus more likely to use daycare and for longer hours. As daycare has became [sic] cheaper and more widely available with the reform, parents may have now more incentives to use daycare than in the past. These results suggest that the voucher policy reach its (primary) goal of increasing the use of daycare services.”

Bousselin said she did “not find a significant effect of the reform on employment of fathers whose youngest child is less than 3 years old.” Rather, parents of 0- to 2-year-olds:

“…modify the childcare arrangement: they are more likely to rely on daycare, with an average increase of 3 hours per week. I do not find that parents substitute the new subsidised places to informal care arrangements, suggesting that there is no crowding out effect of the reform.”

The working paper, “Expanding access to universal childcare: Effects on childcare arrangements and maternal employment”, was published by Liser on 8 August.

Separate Liser research in 2018 found that Luxembourg’s parental leave policy boosted the rate of working mothers.