Spain has experienced a notable increase in female participation in the labor force in recent years, especially among mothers, although a significant gap between mothers and non-mothers persists. This study investigates the impact of both the availability and the quality of childcare on maternal employment rates. I analyse the implications of “Ley Orgánica 2/2006,” a policy aimed at regulating and enhancing the quality of early childhood education. Using staggered difference-in-differences and interactive fixed effects methodologies with rich microdata from 2004 to 2018, I explore how improvements in nursery school quality affect the child penalty faced by mothers.

    The results reveal that while the policy slightly improved the quality of early education, it also led to a substantial reduction in the availability of childcare. This unintended decrease in access reduced the supply of mothers' labor in the provinces where the policy was implemented. The analysis shows heterogeneous impacts, with lower work-flexibility workers being more affected (i.e., non-college degree holders or private-sector workers) and no effect on more income-constrained groups, such as single mothers. Mechanisms indicate that childcare responsibilities were shifted primarily to mothers and not to other informal caregivers or fathers. In addition, suggestive evidence reveals that families value quantity over quality. These findings provide critical information for policy-makers seeking to balance improvements in childcare quality with maintaining accessibility to support maternal employment.