Effect of the 20 Hours Early Childhood Education Reform on women’s labor market outcomes in NZ

The development of comprehensive childcare policies has become an important driver for governments in the hopes of improving labour market outcomes for women. Although some accommodation for work and family are in place, mothers still encounter barriers to the labour market, often referred as the motherhood penalty. This study provides a comprehensive analysis of the impact of the 20 Hours Early Childhood Education (ECE) reform in New Zealand, and how its economic incentives indirectly affect outcomes for mothers in the labour force. Our quasi-experimental framework uses a difference-in- differences (DD) model, as well as a triple-difference model (DDD), on both two-period and multi-period specifications. Our findings support the hypothesis that reducing the price of childcare increased maternal earnings for women. The estimates show a reduction of the motherhood penalty between mothers and childless women but are statistically insignificant.

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