The Effect of Korea's Universal Early Childhood Education and Care Services on the Employment Rate of Mothers with Children

Background/Purpose:

Korea is one of the Asian countries that experienced rapid development, and as a result, women's participation in the labor market has grown rapidly. However, due to the significant responsibility of caring for children, the employment rate of Korean women has followed an M-shaped curve until recently. Therefore, the Korean government has been consistently expanding public childcare services since the 2000s and eventually introduced universal early childhood education and care (ECEC) services in 2013. This program enables any household in need of center-based childcare to receive basic childcare fees through vouchers. Consequently, since 2017, the utilization rate of center-based childcare has steadily exceeded 70%, and government-led center-based care has become a major form of childcare for preschool-aged children.

The goal of this study is to determine whether the expansion of universal childcare services in Korea has increased the employment rate of women, despite the continued prevalence of traditional family models in the Korean context. Previous research has presented mixed employment effects of universal ECEC services on women with children, but these studies relied on unreliable data. This study uses reliable data and DID strategies to analyze the employment impact of childcare services and to draw policy implications.

Methods:
Data and samples:

The population census is a fundamental statistic of Korea and provides vast information about the entire population. To compare the impact of universal ECEC services, before (2010) and after (2015 and 2020) time were selected. In order to enhance the comparability of our analysis while considering Korea's traditional family model, we limited the household characteristics to those with three members, including only one child and a working spouse. The total number of cases analyzed was 12,228 women.

Measures:

This study employs a DID design to measure the employment rate difference between two groups: mothers whose children aged 5-6 received universal childcare services (treatment group, preschool-aged) and those aged 7-8 who didn't (control group, school-aged). This allows us to determine the effect of the service. Additionally, to see if these differences change over time after introducing universal ECEC service, we analyzed the employment effect of 2015 and 2020 compared to 2010 (before universal ECEC). This design is appropriate because child and family care allowances were limited for preschool-aged children, and care services were also limited for school-aged children during the study period.

Results:

There was no significant difference in the employment rate of mothers between the two groups in 2015. However, between 2010 and 2020, the employment rate of mothers who received universal ECEC services for their preschool-aged children (treatment group) was significantly higher compared to the control group by 4.3 percentage points.

Conclusions and Implications:

Therefore, in 2020, Korean women functioning as secondary earners may find it more reasonable to enter the labor market rather than stay home to care for their children. Moreover, the maturation of Korea's ECEC system played a crucial role in promoting women's employment rates compared to 2015. Based on these results, sustained efforts are needed to ensure the childcare services’ availability and high quality.