Stefan Bauernschuster, Professor of Public Economics at the University of Passau University of Passau, University of Passau
Thank-you e-mail written by US economist Cecilia Elena Rouse, chair of the President's Council of Economic Advisers. University of Passau, University of Passau
Public childcare increases mother’s labour market participation – this conclusion from a study conducted by Professor Stefan Bauernschuster, who holds the Chair of Public Economics at the University of Passau, is cited in the current report issued by US President Joe Biden’s Council of Economic Advisers. The Office of the US President thanked the Passau professor by e-mail: "Your work is cited in this volume. I am writing to thank you for helping us shape this report," wrote US economist Cecilia Elena Rouse, chair of the Council of Economic Advisers. This group of economic experts is an advisory group to the president that has its office directly in the White House.
The current US Economic Report is mainly concerned with remedying the labour shortage the US economy has been grappling with in the wake of the economic recovery after the COVID-19 pandemic. The President's advisors propose a number of measures. One of them: investing in childcare. In reference to the study Professor Bauernschuster conducted together with Dr Martin Schlotter, his former colleague at the ifo Institute, they write: "The preponderance of empirical evidence suggests that childcare and preschool programs have a positive impact on maternal labor force participation". The paper had previously been published in a 2015 issue of the prestigious Journal of Public Economics.
The study examines how legal entitlement to kindergarten slots affect maternal employment
Theoretically, public childcare might simply replace private-sector care or care by grandparents without having any impact on the mothers' labor market participation. However, Bauernschuster and Schlotter have found this is not the case in Germany. In order to provide causal evidence, the economists exploited the introduction of the legal entitlement to a kindergarten slot in 1996. On account of this reform, children who turned three shortly before the start of a kindergarten year were quickly given an entitlement to a slot, whereas similar children who turned three just a few days later were not offered the entitlement until a year later. This regulation boils down to an unintended experiment, which allowed Bauernschuster and Schlotter to exclude all other confounding factors and isolate the actual causal effect of the kindergarten slot. "We were able to show that one in three mothers whose youngest child was three was able to work, at least part-time, only because of the kindergarten slot," summarised Bauernschuster.
Investments in childcare also turned out to be less expensive than a comparable increase in child benefits, because, as Professor Bauernschuster puts it: "A large share of the investments quickly end up paying for themselves because mothers who can now return to work pay taxes and social security contributions." "What's more, we were able to show in another study that an increase in childcare coverage also caused the birth rate to rise at a rate five times higher than a comparable investment in child benefits." Papers published by other researchers have shown that childcare positively impacts the development of children as well, especially in socio-economically disadvantaged families.
The study conducted by Professor Bauernschuster and Dr Schlotter grew out of a project that had evaluated marriage- and family-related policies in Germany for the Federal Ministry for Family Affairs and the Federal Ministry of Finance. The paper was widely discussed in public and may have encouraged the direction taken in German family policy.
Personal profile
Professor Stefan Bauernschuster holds the Chair of Public Economics at the University of Passau and is a principal investigator in the DFG Research Group 2720: "Digital Platform Ecosystems (DPE)". Furthermore, he is research professor at the Ifo Institute in Munich, CESifo research fellow, IZA research fellow and member of the Standing Committee for Social Policy at the German Economic Association. The Handelsblatt economists ranking included Professor Bauernschuster among the top 100 researchers under forty both in 2017 and 2019. In his research, he uses microeconomic methods to answer policy-relevant questions in the fields of labour, population and health economics.
Contact for scientific information:
Professor Stefan Bauernschuster
University of Passau
Chair of Public Economics
Innstraße 27, 94032 Passau
E-mail: stefan.bauernschuster@uni-passsau.de
Original publication:
https://www.sciencedirect.com/science/article/abs/pii/S004727271500002X?via%3Dihub
Corrections
01.01.1970
