December 2019

IZA DP No. 12814: Childcare and Maternal Employment: Evidence from Vietnam

Hai-Anh Dang, Masako Hiraga, Cuong Viet Nguyen

Little literature currently exists on the effects of childcare use on maternal labor market outcomes in a developing country context, and the few recent studies offer mixed results. We attempt to fill these gaps by analyzing several latest rounds of the Vietnam Household Living Standards Survey spanning the early to mid-2010s. Addressing endogeneity issues with a regression discontinuity estimator based on children's birth months, we find a sizable effect of childcare attendance on women's labor market outcomes, including their total annual wages, household income, and poverty status. The effects of childcare attendance differ by women's characteristics and are particularly strong for younger, more educated women. Furthermore, we also find that childcare has a medium-term effect.