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Does more free childcare help parents work more?

IFS Working Paper W16/22

Many governments are considering expanding childcare subsidies, but little is known about the impact of such policies on parent’s labour supply. Exploiting free childcare eligibility rules based on date of birth in a difference-in-differences framework, we compare the effects of offering free part-time childcare and of expanding this offer to the whole school day. Free part-time childcare only affects the labour force participation of mothers whose youngest child is eligible. Expanding from part-time to full-time free childcare leads to significant increases in labour force participation and employment of these mothers, which emerge immediately and grow over the months following entitlement.

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Briefing note
In this new work, the researchers compared what happened to the labour market outcomes of mothers and fathers as their children moved from being entitled to a free part-time nursery place (offering 15 hours of free childcare per week) to a full-time place at primary school (which effectively offers ...