Child-care policy and the labor supply of mothers with young children: A natural experiment from Canada

Abstract:

In 1997, the provincial government of Quebec, the second most populous province in Canada, initiated a new child-care policy. Licensed child-care service providers began offering day-care spaces at the reduced fee of $5.00 per day per child for children aged 4. By 2000, the policy applied to all children not in kindergarten. Using annual data (1993&em;2002) drawn from Statistics Canada's Survey of Labour and Income Dynamics, the results show that the policy had a large and statistically significant impact on the labor supply of mothers with preschool children.