Universal Daycare and Mothers' Working Lifetime

This paper examines the effects of universal daycare on mothers’ labor force partici-
pation, full-time employment, and earnings over their working lifetime. I exploit dif-
ferential access to daycare caused by a roll-out of daycare centers across Denmark
in combination with rich administrative data. Daycare availability has persistent ef-
fects on labor force participation and increases long-run earnings. Reduced fertility
and parental separation are potential mediators behind the participation effects. For
higher-educated mothers, participation effects diminish over time, whereas earnings ef-
fects prevail in the long run. These results suggest that labor market attachment during
child-rearing years has important long-run economic consequences.