The Impact of Extending Childcare on Female Labor in Chile

Researchers:
Marcela Perticará
Fieldwork:
Statcom
Location:
Chile
Sample:
2,110 women selected from 25 schools
Timeline:
2012 - 2013
AEA RCT registration number:
AEARCTR-0001415

Partners:

Childcare duties are often cited as one reason why labor force participation is typically lower for women than men. In Chile, researchers conducted a randomized evaluation to measure the effect of providing free after-school care for children ages 6-13 on women’s labor market outcomes. The program increased women’s labor force participation and employment, and increased the use of daycare for young children who were ineligible for the program, suggesting that women need childcare for all of their children in order to join the labor market.

Policy issue

Increasing women’s labor force participation, defined as being employed or actively looking for work, can help alleviate poverty by generating additional income, especially for women-led households, which tend to be among the poorer households in Latin America. Yet, labor force participation is typically lower among women than men, and women often cite the absence of childcare as the main reason for not participating. In this context, providing free childcare may be an effective way to increase women’s involvement in the workforce . However, if women simply substitute paying for childcare with free childcare services, this would lead to no overall change in use of childcare or subsequent labor market outcomes. In addition, providing free childcare for children of some age groups but not others may also have little effect on employment outcomes for women who care for multiple children. To address these questions, researchers conducted a randomized evaluation to measure the impact of providing free childcare on mothers’ employment and labor force participation in Chile.

Context of the evaluation

Despite significant growth in female labor force participation in Chile over the last two decades, only 49 percent of women participated in the labor force in 2011, compared to 75 percent of men.1  Labor force participation is particularly low among less educated women, women with small children, and women in low-income households. Furthermore, female-headed households are more prevalent among the poor: In 2011, women led 39 percent of all households and 51 percent of poor households in Chile.

Many Chilean women cite childcare responsibilities as the main reason why they do not seek employment. In Chile, the government provides free public childcare for children younger than age 5, but free care for children older than 5 is rare. One exception is the government-sponsored 4-7 Program, which offers three hours of public afterschool childcare for children between the ages of 6 and 13.

Children in Chile.
Children in Chile

Details of the intervention

Researchers conducted a randomized evaluation to measure the effect of the 4-7 Program, a free, three-hour after-school program for children ages 6-13 , on women’s employment and labor force participation. The study included 25 schools that offered the program for the first time in 2012. Among 2,110 eligible women across all schools, 1,137 randomly selected women were offered the program, while the remaining 973 eligible women were not, and formed the comparison group.

Eligible program participants included women responsible for at least one child between ages 6 and 13, who were also economically active (working, seeking work, unemployed, involved in training courses, or completing an educational program), over eighteen years old, and below a certain poverty level. The program was offered starting in March or April and ending in December 2012.

To measure the impact of the program on women’s labor market outcomes, researchers conducted household surveys a year after the program began.

Results and policy lessons

Offering the 4-7 Program increased mothers’ employment and participation in the labor force. The program also increased the use of daycare for young children who were ineligible for the program, suggesting that women need childcare for all their children in order to join the labor market .

Program use and substitution: Women who were offered the program were 29 percentage points more likely to utilize the program than the comparison group. Offering the program increased the use of any childcare by 5.9 percentage points (from 49 percent in the comparison group), a 12 percent increase.. This indicates that the program allowed some mothers who had been caring for their children in the afternoons to send them to the program and use this time for other activities . However, a substantial share of women who used the program already had their children enrolled in childcare and simply used the 4-7 program as a substitute for other childcare options.

Female labor force participation and employment: Offering the program increased mothers’ labor force participation and employment. Offering the program increased mothers’ labor force participation by 4.3 percentage points, from 60.5 percent in the comparison group (a 7 percent increase). Since the program did not influence the availability of jobs in the market, the program had a positive, but smaller, impact on mothers’ employment. Offering the program increased the probability of mothers working at least one month per year by 3.4 percentage points, from 71.6 percent in the comparison group (a 5 percent increase).

Differing impacts: The positive effect on labor force participation was larger for women who were not working before the program with children under age 6. In this subgroup, offering the program increased labor force participation by 19 percentage points, from 22.9 percent in the comparison group. In line with these results, offering the 4-7 Program increased the use of formal childcare services for children under 6 years old by 6.5 percentage points, from 7.8 percent in the comparison group. These results suggest that the 4-7 program effectively lifted the highest barrier women in this subgroup faced to entering the labor market—finding childcare for their older children—allowing them to take full advantage of the supply of available free childcare for younger children . However, the program had no impact on labor force participation for women without children under the age of 6, who were not working before the program.

Income and spending: While the program had no average impact on monthly income or stress levels, it increased women’s expenditures on themselves and on their children’s education.

Taken together, these results imply that increasing access to afterschool care can increase female labor force participation, but it is not a universal solution. Particularly for women with less labor market experience, additional policies might be needed.

Martínez A., Claudia, and  Marcela Perticará. "Childcare effects on maternal employment: Evidence from Chile." Elsevier Volume 126, May 2017, Pages 127–137.

Martínez A., Claudia and Marcela Perticará. "After-School Effects on Students’ Academic Outcomes: Evidence from Chile." Working Paper, May 2018.

1.
World Bank. 2016. “Labor Force Participation Rate, Female.” World Development Indicators.; ILO, 2015. “Labour force participation rate – ILO modeled estimates, July 2015.” International Labour Organization. Accessed April 14, 2017.