The Supply of Childcare in Britain: Do Mothers Queue for Childcare?

Abstract

This paper presents a model of partial observability applied to the childcare market in Britain. We simultaneously estimate the demand and use and calculate the excess demand for childcare. We find a large queue with nearly half of the mothers demanding childcare queuing for it. We also find that formal and informal care are not substitute, implying that policies increasing the supply of formal care lead to an increase in the use of care rather than solely a shift from informal to formal care. This has implication on the efficiency of policies aiming at increasing the labour supply of mothers.supply of childcare