A new research paper has been released that investigates the impact of government provided child care on women’s careers.
Using a unique employer-employee matched dataset from Germany and persistent county level differences in government provided child care between East and West Germany, we find that women and, particularly mothers, earn higher salaries if child care provision is high. In addition, they are more likely to experience large positive wage changes. Results are accentuated for high female wage earners, women with higher education, and mothers with many and small children.
The positive impact of child care provision on women’s careers results in a larger pool of qualified women firms can draw from. In line with this view, it shows that the negative stock market reaction to mandated gender quotas that has been posited in the literature is mitigated for firms located in regions with high government provided child care.