Waitlisted! A policy analysis on childcare reform and its effect on female labour force.

Abstract: The municipality Yokohama in Japan implemented a new child care reform in 2010, which in 2013 managed to eradicate the long child care waiting list in the area. This paper focuses on how an increase in child care supply has affected the female labour force in the region Kanto, of which Yokohama is a part. We also focus on how the number of children enrolled in day cares in the prefecture Kanagawa, of which Yokohama is a part, is affected by the policy. To identify the impact of the child care reform, we use a difference-in-difference method that compares the female labour force in Kanto and the rest of Japan during the years before and after the policy was implemented. We also compare the number of children enrolled in day cares in Kanagawa with the rest of Japan during the same period. Our results show that the female labour force in Kanto has increased by 7% and the number of children enrolled in childcare has increased in Kanagawa by 10%. Due to data limitations we cannot be sure that the increase is solely due to the policy in Yokohama. However, as these increases have occurred during the same time frame, it is possible to draw the conclusion that the policy has had a positive effect in the area.