Family and employment: A little help goes a long way with daycare places and labor market return

In Germany more than in comparable countries, the birth of a child still contributes to the fact of women working and earning less in the long term. For women with a low educational level, the so-called gender gap in working hours is particularly pronounced. It is striking that less educated parents are significantly less likely to take advantage of childcare services for children up to the age of three than better educated parents.

“One important reason for this imbalance is the complicated, decentralized and often non-transparent allocation of daycare places. Higher-educated parents have advantages here because they often have more knowledge and resources to successfully complete the registration process", is how Dr. Henning Hermes from the University of Düsseldorf describes the hypothesis of a team from several research institutions.

The researchers therefore investigated whether access to daycare places can be facilitated for families with lower educational backgrounds and whether women benefit from this in terms of working hours and income as a result. They initially started by surveying more than 600 families with children under one year of age. Then, some of the parents watched a four-minute informational video about eligibility for childcare, low-income fee waivers, and the benefits of applying early and applying multiple times. In addition, they were offered individual support by students (trained for this purpose) in the daycare application process. For example, they researched information about childcare facilities and application procedures, helped with filling out forms, and reminded people of important deadlines. After a period of six months and 1.5 years respectively, the families were interviewed again.

An initial analysis already published in 2021 showed: The proportion of families with a daycare place was about two-thirds higher among families with lower educational backgrounds who had been given support with their application. At the same time, fathers cared more for their children, resulting in a 30 percent reduction in the inequality between mothers and fathers in caregiving effort.

Now, the team of researchers has shown for the mothers with lower levels of schooling: Because of the relief provided by the daycare centers, many women were able to return to work full-time or with substantial hours. Mothers who obtained help with daycare applications were about two and a half times more likely to work at least 30 hours per week compared to mothers who did not receive any help. In comparison, they worked five hours more per week. Families who received support were also 20 percent less likely to live a family model in which the father worked full-time and the mother worked part-time.

The number of working hours had a significant impact on the financial situation of families with lower educational backgrounds. In those families who received help, the income of working moms was 22 percent higher, and household income was 10 percent higher as a result. The wage gap between women and men was about one-third smaller within households. For families with higher educational qualification, on the other hand, support with daycare applications had no effects – neither on daycare places nor on mothers' working hours or income.

"Better access to daycare leads to greater equitability – both between higher and lower educated families and within families between fathers and mothers. This is true for the division of care times just as it is for working hours and income", says Prof. Dr. Philipp Lergetporer of the Technical University of Munich (TUM).

The study is the first randomized controlled trial (in which participants are randomly assigned to different groups) to demonstrate that daycare access does indeed have an effect on labor market participation among mothers with lower educational qualifications. "This is also very important because women without Abitur (general qualification for university entrance) work less than women with Abitur even before they have a child", says Marina Krauß of the University of Augsburg.

Improving conditions in this field requires little effort – students helped the families for an average amount of time of just 1.5 hours. "So support for families who are having trouble navigating the daycare system is a simple tool with a big effect", says Dr. Frauke Peter of the German Center for Higher Education and Science Research (DZHW). "However, it would make even more sense", emphasizes Prof. Dr. Simon Wiederhold of the KU, "to simplify the application process and increase the number of daycare places to an extent that ensures that no external help is needed at all."

Publications:
Henning Hermes, Marina Krauß, Philipp Lergetporer, Frauke Peter, Simon Wiederhold. Early Child Care and Labor Supply of Lower-SES Mothers: A Randomized Controlled Trial. Munich Papers in Political Economy, CESifo Working Paper No. 10178/2022
https://www.cesifo.org/DocDL/cesifo1_wp10178.pdf

Henning Hermes, Philipp Lergetporer, Frauke Peter, Simon Wiederhold. Behavioral Barriers and the Socioeconomic Gap in Child Care Enrollment. CESifo Working Paper No. 9282/2021
https://www.cesifo.org/DocDL/cesifo1_wp9282.pdf

The current publication is a working paper that has not yet gone through the peer review process.