a column by Francesca Carta and Lucia Rizzica for VOX: CEPR’s Policy Portal
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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