Childcare, maternal employment and residential location

The economic literature provides mixed evidence of the relationship between local childcare provision and maternal employment. We document this question further by focusing on the role of the provision of childcare services close to the family's residential location. We use a simultaneous equations approach to estimate the employment and childcare decisions of mothers of children aged 0-3, conditional on their residential location. Our estimates are based on a rich data set, which matches household and individual level microdata for Luxembourg in conjunction with municipality level data (provision of childcare services and other local amenities) and travel time distances for the year 2011. In line with the evidence provided by the recent literature, we find that, in a context where the female employment rate and the availability of childcare have increased over the last years, policies that make childcare services more widely accessible have no effect on maternal employment.