The Effect of Grandparental Support on Mothers' Labour Market Participation: An Instrumental Variable Approach

Eur J Population (2014) 30:369390

DOI 10.1007/s10680-014-9319-8

Bruno Arpino Chiara D. Pronzato Lara P. Tavares

Received: 6 November 2012 / Accepted: 25 January 2014 / Published online: 30 July 2014 Springer Science+Business Media Dordrecht 2014

Abstract Childcare arrangements are key in womens ability to juggle motherhood and work outside the home. As such, the study of access to childcare and its use is of great policy relevance. We focus on a particular kind of informal childcare, the one provided by grandparents. Empirically, assessing the effect of grandparental childcare is not an easy task due to unobserved preferences. In light of the potential outcome framework, we interpret the biases resulting from unobserved preferences as arising from the non-compliance of mothers to the availability of grandparents and from preferences of grandparents for activities other than childcare. Using an instrumental variable approach on Italian data, we nd that the effect of grandparental childcare on mothers labour supply is positive, statistically signicant and

B. Arpino

Department of Political and Social Sciences and Research and Expertise Centre on Survey Methodology (RECSM), Universitat Pompeu Fabra, C/Ramon Trias Fargas, 25-27,08005 Barcelona, Spaine-mail: [email protected]

C. D. Pronzato (&)

Department of Economics and Statistics, University of Turin, Turin, Italy e-mail: [email protected]

C. D. Pronzato

CHILD Collegio Carlo Alberto, Turin, Italy

C. D. Pronzato L. P. Tavares

Carlo F. DONDENA Centre for Research on Social Dynamics, Bocconi University, Milan, Italy

L. P. Tavares

Instituto Superior de Cincias Sociais e Polticas, Universidade de Lisboa, Lisbon, Portugal e-mail: [email protected]

L. P. Tavares

CESNOVA, Centro de Estudos de Sociologia da Universidade Nova de Lisboa, Lisbon, Portugal

The Effect of Grandparental Support on Mothers Labour Market Participation: An Instrumental Variable Approach

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economically relevant. The effect is stronger for less educated mothers, with young children and living in northern and central Italy.

Keywords Female labour market participation Grandparental childcare

Intergenerational transfers Instrumental variables Unobserved preferences

1 Introduction

Childcare arrangements are a key element in the work decisions taken by mothers insofar as they are fundamental to the ability of women to juggle childcare and participation in the labour market. In the traditional economic models of female labour supply, where formal childcare is usually conceptualized as being provided by the market, childcare costs are seen...