Can Childcare Benefits Increase Maternal Employment? Evidence from Childcare Benefits Policy in Japan

Shinsuke Asakawa () and Masaru Sasaki ()
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Shinsuke Asakawa: Osaka University
Masaru Sasaki: Osaka University

No 13589, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We estimate the policy impacts of the resumption of income thresholds for childcare benefits (CB) policy in April 2012 on female labor market participation, expenditure on childcare services, and child health outcomes using the Longitudinal Survey of Newborns in the 21st Century in Japan. We use a regression discontinuity design and find that the reduction of CB payments in households where the annual income of the higher-earning exceeded their threshold encouraged mothers to start working as part-time workers or self-employed, both in terms of intensive and extensive margins of labor supply. Furthermore, we find that some mothers who started working as part-time workers because of the cuts in CB used to work full-time before giving birth and quit after giving birth. Even though the mothers resumed work outside the home, expenditure on childcare services and child health outcomes were little affected. Our results imply that the CB payments had a negative income effect on employment of mothers who used to work outside the home before giving birth and might prevent some mothers from pursuing their lifetime careers, especially among higher-income households.

Keywords: means test; maternal re-employment; child health; birth separation; childcare benefits policy; regression discontinuity design (search for similar items in EconPapers)
JEL-codes: J16 J21 J38 (search for similar items in EconPapers)
Pages: 67 pages
Date: 2020-08
New Economics Papers: this item is included in nep-lma
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Published - published as 'Can child benefit reductions increase maternal employment? Evidence from Japan' in: Journal of the Japanese and International Economies, 2022, 66, 101231

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