Crowding-Out Effect of Publicly Provided Childcare: Why Maternal Employment Did Not Increase

Abstract

We estimate the causal effects of childcare availability on the maternal employment rate using prefecture panel data constructed from the Japanese quinquennial census 1990-2010. We find that childcare availability did not increase maternal employment, because the expansion of accredited childcare crowded out informal childcare provided by grandparents. However, as more and more families do not live with grandparents who used to take care of grandchildren, this crowding effect became weaker in the 2000's.