Free Childcare and the Motherhood Penalty: Evidence from São Paulo
with Rafael Latham-Proença, Marcela Mello and Joana Silva
Abstract
Latin America consistently has some of the world's largest motherhood penalties for women, and while subsidized childcare is often advanced as a remedy, the literature on its effectiveness is scarce outside developed countries. This paper estimates the impact of a rapid expansion of public childcare on mothers' careers in the city of São Paulo. We leverage the precise location and timing of the expansion of childcare facilities, coupled with detailed data on the labor market and household characteristics to identify effects on mothers' formal employment and earnings. Using a difference-in-differences approach, we compare the motherhood penalty in districts that experienced a large and rapid expansion of childcare with districts with no significant expansion. Our results show that an additional seat per child leads to an increase of 6.8 p.p. in the mothers' formal employment (about 20% of post-birth mean) after the first child's birth. We do not detect any effect of this expansion on two comparison groups: mothers-to-be and fathers.
Main result
