The causality between female labour force participation and the availability of childcare

Abstract

It is typically found that the labour force participation of women is negatively affected by the presence of young children. This paper focuses on the causality, in the sense of Granger's definition, between the participation of mothers of young children and childcare provision. It is found that childcare Granger causes participation without feedback, which supports the claim that women could be constrained in their participation by the lack of childcare facilities. The absence of a feedback mechanism raises the issue of childcare supply not reacting to market mechanisms.