Effect of lengthening the school day on mother's labor supply

Abstract

This article examines how a policy oriented toward a specific group within the population can have collateraleffects on the economic decisions of other groups. In 1996, the Chilean government approved the extension ofthe school day from half- to full-day school. This article exploits the quasi-experimental nature of the reform’simplementation by time, municipality, and age targeting of the program in order to examine how the maternallabor supply is affected by the childcare subsidy implicit in the lengthening of the school day. Using data fromthe Chilean socioeconomic household survey and administrative data from the Ministry of Education for1990–2011, we estimate that, on average, there is a 5 percent increase in labor participation and employmentrates of single mothers with eligible children (between 8 and 13 years old) with no younger children, who arethe group that would be mainly affected by the policy. No significant labor supply responses are detectedamong others mothers with eligible children.