Impact Evaluation of “ Programa Estancias Infantiles para Apoyar a Madres Trabajadoras ” Daycare program in Mexico

1. ImpactEvaluation of “Programa Estancias Infantiles para Apoyar a Madres Trabajadoras” Daycareprogram in Mexico Enrique Seira November 18, 2009

2. Somebackground

3. WOMEN´S LABOR FORCE PARTICIPATION Lastcenturyweexperienced a sharpincrease in female labor forceparticipation (FLFP). FLFP of youngwomenislaggingbehind in developingcountries • Female labor forceparticipation in Mexicois 46%, lowerthanthe OECD average of 60%, althoughhigherthansomeothercountrieswith a similar level of development. • Although in somedevelopedcountriesthe FLFP has been flat recently, it has increasedforwomen in their 30s withsmallchildren, highlightingthepotentialimportance of childcareprovision. Female Labor Force Participation 2008 US Female Labor Force Participation and % with children <6 yrs

4. BARRIERS TO FLFP Sincehigher FLFP mayhavebenefits, includyinghigherproduction and higherempowerment of womenamongothers, itisimportanttounderstanditsdeterminants and howpolicyactionsaffectit • Someoftenmentionedbarrierstofemalelabourforceparticipation: • Cultural roles assignedtowomen (seeReimers 1985 AER; Golding 2006 AER). • Differences in productivityowingtodifferences in accumulation of humancapital. • Limitedexistence of part time jobsand service sector jobs (Goldin 2006 AER). • Howmuch can externalchildcarehelp in overcomingthesebarriers? • Can womenfindbetterjobsand accumulate more human capital iftheyhaveto devote less time tocaringdirectlyfortheirchildren? • Can thecultural role of mother as theprimarycaregiverberelaxedifexternalchildcareisshownnottobedetrimentaltochilddevelopment? • Can subzidizedchildcareprovidemore equitableaccesstoqualitychildcare?

5. ACADEMIC RESULTS RELATED TO CHILDCARE ChildCare, FLFP and Childoutcomes: resultsfromtheeconomicsliterature • WomenwithChildren: • Itis a wellknownfactthat FLFP islowerforwomenwithsmallchildrenthanthosewith no children. • Econometricstudieshavefoundthatthecost of childcare has a significantimpacton FLPF (e.g.Connelly 1992, REStat): the elasticity of the probability of FLFP due to a change in the average cost of child care is estimated to be -0.20! (and many estimates are closer to -1.0) • “…women with very young children could be expected to participate in the labor markets at rates equal to women with older children were it not for the cost of child care…” • Possibleeffectsof childcare: • “Goodoutcomes”: Increasedaccesstosubsidizedexternalchildcaremayimprove FLFP, householdincome and theeconomy´sproduction • “Not so goodoutcomes”: itmaybethe case thatsubsidizedexternalcareonlycrowds-outfamilychildcarewithlittleeffecton labor supply; alsochildoutcomesmayworsenifthequality of externalcareis a poorsubstituteforfamilycare. EvidencefromCanada.

6. Theprogram

7. THE PROGRAM Withtheaim of increasing labor supply and helpyounglow-incomemothers, thegovernmentcreatedthe “Daycareprogramtohelpworkingmothers” • Mainobjective: Support working mothers and single parents with preschool children to access or continue in the labor market (or school), by increasing the supply of daycare centers and providing subsidized care for children. • Objectivepopulations: • 1. Supportworkingmothersor single f withchildcaresubsidy: • Withchildrenbetween 1 – 4 yrs (up to 6 yrsforchildrenwithdissabilities) • Monthlyhouseholdincome < 6 min wage ( US $770) • Subsidypaiddirectlytodaycare center (as a functionof childattendence and householdincome) • HH income < 4 mw MX $700 ( US $53) • HH incomebetween 4 – 6 mw MX $450 ( US $34) • 2. Supportexpansion of supplywithsubsidy: • Creation new facilities: MX $55,000 ( US $4,200 ) • Improveexistingfacilities: MX $35,000 (US $2,600)

8. PROGRAM EVOLUTION Theprogram has evolvedrapidly, reachingalmost 250,000 children in about 2 years. Howeverwe are still in theprocess of evaluatingifitsultimategoalwasmet. • 243,000+ children • 8,660 Daycare centers • Presence in 1,163 municipialities. • 451 in locations with <2,500 inhabitants and 355 in localitieswith 2,500 and 5000 inhabitants. • 45,032 jobsgenerated in estancias, 99% women. Number of children Number of Estancias

9. Evaluationin progress

10. STUDY: QUALITIATIVE AND QUANTITATIVE Two studies: a qualtitative study to inquireintothelikelychains of effects and limitations of theprogram, and a rigorousimpactevaluationtounderstand causal effectson labor supply and childoutcomes • Questionsqualitativestudy: • Whoisinterested in externalchildcare? • What are themainbarriersfortake-up? • Whatmaythebenefitsbe and forwhichpopulations? • Questionsimpactevaluation: • Whattype of careissubstitutedaway? • Does labor supplyincrease? Byhowmuch? Intensiveorextensivemargin? • Ischilddevelopmentaffected (behavioral and cognitivemeasures)? • Do programbenefitsoutweightitscosts?

11. QUALITATIVE FINDINGS Themostimportantfindings of thequalitativestudywerethefollowing: • Cultural barriersfeatureprominentlywithrespecttoprogramtake-up: “itistheresponsability of womentoraisetheirchildren”. • Thesebarriersvariedwidelygeographically(stronger in theSouth) • Amongthetakers, themostcitedbenefitswere: • Increasedflexibilitytosearchfor and findjobs, especially in the formal sector which has lessflexibility in terms of workingschedule. • Forthoseworking: a higherproductivity in theworkgivenlessdistraction/concernwithchild. • Womenfelt more empowered and had more flexibilityondecidingallocation of householdincome. • More quality time withchild (quality-quantitytradeoff). • Affordabilityfeaturedprominently. • Amongtheowners of daaycarefacilities: • Incomesource. • Opportunitytohelp.

12. IMPACT EVALUATION ImpactEvaluation • Mainobjective: estimatethe causal effect of theGuarderiasProgramonhousehold labor supply and childoutcomes. • EvaluationfundedbyGovernment of Mexico, withresearchsupportfromWorldBank’sGenderAction Plan: (>10% of budget. Greatly improved methodological design). • Methodology: “Pipeline Approach”. • Initial experimental design, butnotfeasible in practicegivenlack of over-subscription (AH1N1 virus, etc). • Compare householdsthathavebeenaccepted (treatmentgroup) at theguarderia vs. householdswaitingtobeaccepted(control group). • Applicationformserves as baselinesurvey. • Do a follow-up surveycomparingtreatmentand control groupsafter6 months of exposuretoprogram. • Questionnaire: Has a job, jobcharacteristics, jobsearchintensity; Childcare: substitutes, quality; Childoutcomes: behavioral, cognitive and nutritionaloutcomes.

13. BASELINE SURVEY Someresults of baselinesurvey: cultural barriersand availability of substitutesmaybeanimportantdeterminant of take-up

14. BASELINE SURVEY Current child care might not enhance early child development • Mothers have approximately 7 years of schooling

15. BASELINE SURVEY Willingtoworkbutneedexternalchildcare

16. CONCLUSION Conclusion • We think external child care will have a strong positive effect on labor supply without adversely affecting child outcomes • To our knowledge this will be the first in depth evaluation of the issue using a quasi-experimental methodology.

17. Thankyouforyour time and thanks GAP forthesupporttothisresearch!

18. APPENDIX

19. PROCEDURE TO OPEN A ESTANCIA Theprocedureto open up a estancia is as follows: Applicantsfor estancia are evaluatedforpsychologicalaptitudeforchildcare. Governmentvisitspotentiallocaletoevaluateviability and suggestchanges. Governmentprovides training in operation rules, management of estancia, childhealth and care, and ludicactivities. Thepotentialownerpresentsbudgetforchanges and equipment and governmentgives up to US$ 4,151 (55 mil pesos). Governmentimplements a secondvisittoverifychangesweremade and localeisready. Theownerimplementspromotion of estancia. Estancia ownercollectsapplicationforms and governmentevaluateseligibility and approvessubsidyifeligible. Theestancia´slimitisnotsurpassed.