Funded by OeNB Jubiläumsfonds (Project 18991)
Project duration: 01/2025-12/2027
Abstract:
While the employment rate for women in Austria has increased by 26 percent over the past quarter century, this increase is largely due to an increase in part-time employment. To address current labor shortages, promoting higher labor force participation among mothers of young children and encouraging longer work hours is crucial. This requires access high-quality childcare for all parents, regardless of income. In this project, we estimate the impact of childcare costs and parental part-time work (PPTW) rights on parents’ labor market outcomes using advanced methods of causal inference. We also examine potential channels (e.g., childcare supply, preferences) and heterogeneities (e.g., with respect to income or labor market conditions). The proposed research provides the first causal evidence on the impact of PPTW rights on parents’ labor market outcomes in Austria and contributes to the ongoing discussion regarding the impact of childcare costs on mothers’ and fathers’ labor supply.
We analyze two policies aimed at helping parents reconcile work and family life in Austria. We focus on the costs of childcare and the legal right of parents to work part-time. First, we exploit variation in different childcare policies at the federal level to identify the effects of childcare costs on the labor supply and earnings of mothers and fathers. Second, we study a reform that provided the legal right to work part-time for parents with children under the age of seven. We investigate the extent to which this policy has succeeded in improving mothers' labor market attachment and how it has affected fathers' labor supply. We also examine if women of childbearing age faced increased statistical discrimination in hiring and promotions due the introduction of parental part-time work rights. Our analyses are based on high-quality administrative data (e.g., Austrian Social Security Data), which are complemented by childcare statistics and survey data from the Austrian Microcensus.
In our analyses, we apply advanced methods of causal inference. First, we use the introduction and subsequent withdrawal of free full-day childcare in some Austrian states within a staggered differences-in-differences (DD) model to estimate the causal effect of childcare costs on parents’ labor market outcomes. Second, we use a regression discontinuity design exploiting two discontinuities in the eligibility criteria i.e., date of birth and firm size, to estimate the causal effect of the parental part-time work (PPTW) reform on parents’ labor market outcomes. To identify potential unintended effects of the PPTW policy on labor market outcomes, we use a DD approach comparing women of childbearing age to different control groups (older women and men of the same age), before and after the reform. We will apply several validation and falsification methods to assess the plausibility of the identifying assumptions of the research design, as well as the robustness of the empirical findings.
Principal investigator:
Martina Zweimüller
Project members: