Universal Preschool and Mothers' Employment in Mexico

For women with young children, labor participation and child care are jointly determined. A large body of literature has explored the effects of child care and prekindergarten subsidies, changes in preschool laws, and increases in the supply of schools on maternal employment. However results are mixed and most studies have focused on high-income countries. This study provides empirical evidence of mothers' responsiveness to changes in compulsory education laws that target young children in a low-income country. I use the case of Mexico where universal preschool was implemented through a phased-in scheme from 2002 to 2008. After the policy change, a subsequent increase in preschool enrollment was observed and I hypothesize that higher preschool enrollment positively impacted mothers' employment. Through a difference-in-difference methodology, I exploit the continuous state-year variation in preschool enrollment. I compare labor outcomes of mothers of preschool-age children to mothers of younger children, mothers of older children and non-mothers. Individual-level data come from the Mexican Income and Expenditure Household Survey and aggregate data from the Mexican Ministry of Education. First, I estimate the effect of the policy on a child’s probability of preschool enrollment. I found a progressively significant increase in preschool enrollment each year after the change in compulsory education laws. Then, I estimate the effect of increased preschool enrollment on maternal employment measured as the probability of employment and weekly hours worked. Results indicate that higher preschool enrollment increased the employment of mothers of 3– and 4–year old children by 8 to 18 percentage points (pp), respectively, in comparison to mothers of younger children. When compared to mothers of older children, higher preschool enrollment increased mothers’ employment by 6 to 14 pp, and when compared to non-mothers the employment increase ranged from 18 to 15 pp. In adjusted models where treatment was subject to a child’s actual preschool enrollment (and age of the child varied), the effect was higher for mothers of children enrolled in first year of preschool across all comparison groups. For mothers of children enrolled in second year of preschool, changes were smaller but remained statistically significant. When predicted enrollment by state and year was used instead of the observed enrollment rate, estimates remained positive and significant. Positive effects were found on weekly hours worked of part-time employees with 3-year olds. Time and monetary constraints restrict mothers' potential to invest in human capital to fully develop professional long-lasting careers or to simply incorporate into the labor market. Over the past decades several social policies have improved mother’s incentives for work in Mexico, and women have responded positively to those incentives. It is crucial to provide evidence of these effects to support the creation of policies that improve women's economic wellbeing.