Formal childcare and mental health

Childcare and maternal mental health Tapio Räsänen, Aleksi Karhula, Anneli Miettinen, Miia Saarikallio-Torp

Abstract

Research on formal childcare and parental mental health reports mixed results. In this paper, we use regional variation in eligibility rules to identify the causal effect of formal childcare on maternal mental health. Change in the eligibility rule increased the relative price of childcare for 3 to 5-year-old children, which caused older siblings to be taken care of at home alongside 1 to 2-year-old toddlers. The change simplified childcare arrangements but increased the workload from parental care and housework. We find that 3-5-year-old toddlers were less likely to attend formal childcare after the policy change, and that mother’s outpatient medicine purchases slightly decreased. However, small gains in maternal mental health are offset by the large negative effect of longer childcare leaves on maternal depression. In addition, we find that formal childcare for older siblings is beneficial for mother’s employment re-entry after childcare leaves. Instead, longer childcare leaves increase mothers’ antidepressant medicine purchases by 0.5-1 percentage points from 6-8 percent.