Children of a (Policy) Revolution: The Introduction of Universal Child Care and Its Effect on Fertility

40 Pages Posted: 22 May 2014

See all articles by Stefan Bauernschuster

Stefan Bauernschuster

University of Passau - Business Administration and Economics; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute; IZA Institute of Labor Economics

Timo Hener

Department of Economics and Business Economics; Ifo Institute; CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Helmut Rainer

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute

Date Written: April 21, 2014

Abstract

What role does affordable and widely available public child care play for fertility? We exploit a major German reform generating large temporal and spatial variation in child care coverage for children under the age of three. Our precise and robust estimates on birth register data reveal that increases in public child care have significant positive effects on fertility. The fertility effects are more pronounced at the intensive than at the extensive margin, and are not driven by tempo effects or selective migration. Our findings inform policy makers concerned about suboptimally low fertility by suggesting that universal early child care holds the promise of being an effective means of increasing birth rates.

Keywords: public child care, fertility

JEL Classification: J130

Suggested Citation

Bauernschuster, Stefan and Bauernschuster, Stefan and Hener, Timo and Rainer, Helmut, Children of a (Policy) Revolution: The Introduction of Universal Child Care and Its Effect on Fertility (April 21, 2014). CESifo Working Paper Series No. 4776, Available at SSRN: https://ssrn.com/abstract=2439616 or http://dx.doi.org/10.2139/ssrn.2439616

Stefan Bauernschuster

University of Passau - Business Administration and Economics ( email )

University of Passau
Innstrasse 27
D-94030 Passau
Germany

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 81679
Germany

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany

Timo Hener (Contact Author)

Department of Economics and Business Economics ( email )

Nordre Ringgade 1
Aarhus, 8000
Denmark

Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

Helmut Rainer

CESifo (Center for Economic Studies and Ifo Institute) - Ifo Institute ( email )

Poschinger Str. 5
Munich, 01069
Germany

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