Population Research and Policy Review 19: 317–337, 2000.
© 2000 Kluwer Academic Publishers. Printed in the Netherlands.
Does the availability of child care inﬂuence the employment of
mothers? Findings from western Germany
MICHAELA KREYENFELD & KARSTEN HANK
Max Planck Institute for Demographic Research, Rostock, Germany
Abstract. There is a vast empirical literature investigating the effects of child care costs on
female employment. Day-care costs are usually treated as a reduction in female wages and are
supposed to reduce a woman’s propensity to participate in the labor market. In this paper we
argue that an analysis of the effects of child care on the employment of mothers in Germany
should focus on the availability rather than the affordability of care, due to peculiarities of the
German day-care regime. Our empirical ﬁndings cast doubt on the effectiveness of the current
German day-care regime. Speciﬁcally, we question the extent to which it enables mothers to
participate in the labor market.
Keywords: Child care, Female labor force participation, Germany, Public policy
In most industrialized countries, there is a general consensus that day care
should be publicly subsidized. While in some countries day-care subsidies
are intended to promote female employment, others place the focus more
on improving the chances for children from deprived social backgrounds or
on educating pre-school children. Since the pioneering work by Heckman
(1974), day-care costs are usually considered as a reduction in female wages,
which is supposed to reduce a woman’s propensity to work in the labor mar-
ket. However, by focusing primarily on cash subsidies, one has lost sight of
the question, how the access to child care affects the employment decision of
In Germany, as in most western European countries, child care slots are
provided by local municipalities. Due to heavy regulations, high market barri-
ers of entry, and a dominance of public providers, there are hardly any private
providers of day care. It might therefore be the case that individual behavior
is less inﬂuenced by the affordability of day care than by its availability.
In the ﬁrst part of this paper, we review the standard neoclassical approach
that relates child care subsidies to individual behavior. In part two, we discuss
The views expressed in this paper are our own. They do not necessarily reﬂect the views
of the Max Planck Institute for Demographic Research.