Parental Satisfaction and the Supply and Quality of Childcare

Chikako Yamauchi, Australian National University

In order to assist parents with young children to balance family and work, many governments attempt to ensure the provision of accessible childcare. This study investigates how changes in the supply of subsidized childcare are correlated with changes in the utilization of childcare and maternal workforce participation. It combines the new data on the number of subsidized childcare centers in Australia with the 2002-2005 HILDA (longitudinal household survey) based on households’ residential areas. The household-level fixed-effects estimates show that an additional center per 100 children is accompanied by a 35-50% increase in the proportion of households (with more-educated mothers) using center-based childcare and a 14-36% reduction in the proportion of these households using registered nannies. It is also associated with a 32-62% increase in these mothers’ workforce participation. These findings suggest that the effect of subsidized childcare on maternal economic participation is likely to be limited to relatively educated mothers.