Abstract
We analyze a reform that introduced early access to subsidized childcare for 2-year-old children in Italy, exploring the effects on several measures of maternal labor supply and on children's cognitive outcomes. Our identification strategy exploits discontinuities in the eligibility rules and the staggered implementation of the reform. We find that the policy increased mothers' participation in the labor market and lowered the reservation wage of the unemployed, thus increasing their likelihood of finding a job. At the same time, the newly introduced childcare arrangement did not affect children's cognitive development, irrespective of their family background.
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