Jacob Bastian, Lance Lochner, 23 January 2021

As more and more mothers have entered the labour force over the last few decades, it is important to ask what effects this increased participation has had on children. This column discusses how evidence from the Earned Income Tax Credit shows that although working mothers spend less time with their children, this time reduction is not very investment-oriented. This is consistent with evidence showing positive long-run effects of the tax credit on children, suggesting that greater financial resources appear to dominate decreases in time with parents.

Francesca Carta, Lucia Rizzica, 26 June 2018

A growing number of advanced economies are opting for highly subsidised childcare systems. But studies have shown mixed effects of subsidised childcare on children’s outcomes, suggesting a potential trade-off between promoting female labour supply and providing the best care for children. This column shows that an expansion of subsidised childcare in Italy increased female labour supply without hurting children’s outcomes. Childcare could be made more cost-effective by making it conditional on the mother’s employment status, or incentivising firms to provide corporate childcare options.

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