The Transition from the Childcare Program to Support Working Mothers to the Child Welfare Support Program for Working Mothers: The Effect on Maternal Labor Supply in Mexico

Women are still lagging behind men regarding their participation in the labor market, full-time employment, and the wages they earn. Subsidized childcare favors maternal employment for impoverished mothers. In Mexico, the largest childcare subsidized program (PEI) was suspended in February 2019, and replaced by an unconditional cash transfer program (CWSP). Using a Fuzzy Regression Discontinuity, Logistic Regressions, and Heckman Correction models, this study seeks to explain the effect of the transition from the PEI to the CWSP on women’s employment rate in Mexico. The study analyzes 1) the sociodemographic characteristics that explain the participation in the PEI and CWSP, and 2) the effect of the programs’ beneficiaries’ rate in women’ labor force participation. The results suggest that the trend in women’s employment rate didn’t change after the PEI ended and was substituted with the CWSP, at least in the short run. As for the programs’ focalization, the PEI did reach its target...Show moreWomen are still lagging behind men regarding their participation in the labor market, full-time employment, and the wages they earn. Subsidized childcare favors maternal employment for impoverished mothers. In Mexico, the largest childcare subsidized program (PEI) was suspended in February 2019, and replaced by an unconditional cash transfer program (CWSP). Using a Fuzzy Regression Discontinuity, Logistic Regressions, and Heckman Correction models, this study seeks to explain the effect of the transition from the PEI to the CWSP on women’s employment rate in Mexico. The study analyzes 1) the sociodemographic characteristics that explain the participation in the PEI and CWSP, and 2) the effect of the programs’ beneficiaries’ rate in women’ labor force participation. The results suggest that the trend in women’s employment rate didn’t change after the PEI ended and was substituted with the CWSP, at least in the short run. As for the programs’ focalization, the PEI did reach its target population, and the CWSP, as derived from the PEI, also reached its target population. Finally, the largest share of women that participate in the labor force is actually in the municipalities where there is a greater share of beneficiaries.Show less

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The Transition from the Childcare Program to Support Working Mothers to the Child Welfare Support Program for Working Mothers: The Effect on Maternal Labor Supply in Mexico