Does the availability of child care influence the employment of mothers? Findings from western Germany

There is a vast empirical literature investigating the effects of child care costs on female employment. Day-care costs are usually treated as a reduction in female wages and are supposed to reduce a woman's propensity to participate in the labor market. In this paper we argue that an analysis of the effects of child care on the employment of mothers in Germany should focus on the availability rather than the affordability of care, due to peculiarities of the German day-care regime. Our empirical findings cast doubt on the effectiveness of the current German day-care regime. Specifically, we question the extent to which it enables mothers to participate in the labor market.