Tightening Work Requirements for Subsidized Child Care and Maternal Employment

Abstract

This paper examines how tightening work requirements in subsidized child care affects maternal employment. Using Dutch administrative data, we analyze a 2012 reform that capped subsidized child care hours at 140% of the lesser-working parent’s hours. To identify affected households, we construct proxy treatment and control groups based on older siblings’ pre-reform child care use and employ a triple-difference framework. Our findings show that stricter requirements reduced maternal employment by 11.5 percentage points among highly exposed families, with negligible effects on fathers. Mothers responded at both margins: many exited the labor force, while some increased hours to retain subsidies. Child care use also fell sharply, raising concerns about child development, particularly for disadvantaged families. These results demonstrate that intensifying work requirements can have unintended negative consequences on maternal labor supply and family welfare, informing debates on welfare conditionality and child care policy.