Universal Childcare Subsidy Expansion and Maternal Labor Supply: Evidence From South Korea

Jaehee Choi , University of Texas at Austin

South Korea is among a handful of countries that have implemented universal childcare, but no previous studies have examined the causal impact of the recent reform. This paper evaluates the effect of the universal childcare reform on parents' employment and family life satisfaction. The government introduced a staged expansion of universal childcare subsidies across all income groups between 2009 and 2013. Using panel data that provides rich information on household income and assets, I determine each household's annual eligibility and annual tuition coverage rate. Because the tuition coverage rates varied by child's birth cohort and ''income/asset" thresholds, I use these two dimensions as the two sources of the identifying variation in order to implement generalized difference-in-difference regression models. My findings suggest that maternal employment increased by four percentage points during the reform period. In addition, the reform had small but positive effects on various measures of family life satisfaction.

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 Presented in Session 8. Economy, Labor Force, Education, & Inequality