Childcare and maternal employment: Evidence from Vietnam

Abstract

Little literature currently exists on the effects of childcare use on maternal labor market outcomes in a developing country context, and the few recent studies offer mixed results. We attempt to fill these gaps by analyzing several latest rounds of the Vietnam Household Living Standards Survey spanning the early to mid-2010s. Addressing endogeneity issues with an instrumental variable/ regression discontinuity design estimator based on children’s birth months, we find sizable and positive effects of childcare on women’s own labor market outcomes and their household income and poverty status. The effects of childcare differ by women’s characteristics and are stronger for women in the ethnic majority group or women with daughters. These effects are also somewhat larger for areas with higher income levels. Furthermore, we also find that some positive effects last after two years.