When are you coming back? Effect of state-subsidized and employer-sponsored childcare on mothers’ return to work

After giving birth, higher-educated mothers return to work faster and stay with their pre-birth employer more often than mothers with less education. To facilitate more equitable return patterns, public policy and organizational scholars point to state-subsidized and employer-sponsored childcare as potential solutions. We ask how these two childcare approaches affect mothers’ education-specific return timing and destination (pre-birth employer or new employer). Our paper combines representative German linked employer-employee data (LIAB) with county-level childcare information from 2007 to 2019 to address this question. We demonstrate that better state-subsidized childcare reduces education-specific differences in how quickly mothers return to their pre-birth employer. However, equalizing effects decline at the very bottom of the educational spectrum. The equalizing effect also partially extends to employer-sponsored childcare assistance, especially when state-subsidized care is scarce. Nevertheless, employer assistance cannot fully compensate for a lack of state-subsidized infrastructure or prevent mothers’ turnover to a new company. Thus, state-subsidized childcare plays a central role in understanding mothers’ returns to work. We discuss policy implications and how our findings extend beyond the German context.