The Korean Journal of Economic Studies
The Influence of the Increase in Governmentand Publicly Funded Daycare Centers on the Labor Supply of Mothers of Infants and Toddlers
Gyuryang Min (Seoul National University)Year 2019Vol. 67No. 3
This study analyzed the influence of the government policy to increase thenumber of government- and publicly funded daycare centers on the laborsupply of mothers of infants and toddlers. To address the problem ofendogeneity among major variables, this study used the policy of the SeoulMetropolitan Government as the instrumental variable. The analysis resultsshowed that the labor force participation rate of mothers of infants and toddlersincreased by approximately 9.0%p - 11.5%p, while weekly working hoursincreased by 3.85 - 5.18 hours, average monthly income by 221,000 -312,300 won, and the new employment and career retention rate by 10.3%p- 13.6%p. As for educational level, the policy was observed to be moreeffective for high school graduates and less educated people than for thosewith a higher educational level. However, analysis results excluding migrantsshowed that the policy was more effective for those with a higher educationallevel than high school graduation. This suggests that increasing the number ofgovernment- and publicly funded daycare centers facilitates migration of mothers from dual-income families who are high school graduates or lesseducated, while increasing labor participation by those with a highereducational level than high school graduation. In terms of the children’s age,mothers of infants did not show any increase in employment rate, but theirworking hours and wage increased because of the improved participatoryenvironment of the labor market. On the contrary, an increase in theemployment rate of mothers of toddlers was evident. The number of infantsadmitted by daycare centers is relatively smaller than that of toddlers; this maybe because infants whose mothers are already working are usually enrolled indaycare centers, while mothers of toddlers who are preparing to get a job maybe enrolling their children. The results showed that such a policy is veryeffective in increasing the labor supply of mothers of infants and toddlers.