SNS Research Brief 95. Parental Leave vs. Early Childcare

Nabanita Datta Gupta Jonas Jessen

In countries offering good childcare services, there is no evidence that the development of children benefits from more than six months of parental leave. On the contrary, especially children from disadvantaged background benefit from childcare at an early age, according to Nabanita Datta Gupta and Jonas Jessen in a new SNS report.

SNS Research Brief 95. Parental Leave vs. Early Childcare 151.6 KB PDF

Policies such as paid parental leave strengthen career attachment and facilitate work-life balance for families with young children. At the same time, in most high-income countries a universal and subsidized childcare provision is now a key family policy tool for ensuring high female labour force participation. Are the long-run effects on children of spending more time with their parents vs. spending time in childcare roughly comparable or does one type of care outperform the other? This research brief reviews evidence from a number of recent studies bringing casual evidence on the (long-term) effects on children exposed to either parental (mostly maternal) care or childcare in early childhood. The authors focus in particular on the role of childcare quality, parental time use and socioeconomic differences.


  • Increased demand for labour in European countries due to ageing populations and restrictive immigration policies will continually increase the demand for high-quality childcare. Indeed, parents in most European countries now support the ability of mothers of small children to continue to work.
  • The alternative care type available to children matters a great deal. When the alternative care type in society is of low quality and often informal, expanding maternity leave has positive effects on child development. On the other hand, when the alternative care type in society is of high quality, expanding maternity leave hardly has any positive effects, especially after approximately the first six months.
  • On the whole, the quality of care is the most crucial factor, and attending childcare centres of inferior quality can produce negative effects on children’s outcomes in the long run.
  • Children from disadvantaged backgrounds benefit the most from attending formal childcare while children from advantaged backgrounds appear not to be hurt by it. If children from diverse backgrounds attend childcare together from an early age, this tends to enhance social skills and social mobility. However, even in countries with universal childcare systems, minority groups tend to be underrepresented in childcare.
  • Gaps in our knowledge exist on the optimal hours of attendance and determinants of childcare quality, as well as on how expanding paternity leave will affect children’s long-term outcomes.


  • Extend maternity leave only in cases where there is insufficient availability of qualified childcare staff or evidence of strong beneficial effects on maternal physical or mental well-being of doing so. The existing literature finds hardly any positive long-term effects on children of extending maternity leave, especially after the first six months or so.
  • Widen information provision, set up an impartial and transparent application system and lower fees so as to reduce enrolment gaps between socioeconomic groups. Attending childcare from an early age with mixed peers has been shown to reduce the intergenerational persistence in earnings and increase social mobility by way of enhanced social competence of children from low-income families.
  • Make sure not to roll out childcare too rapidly in a society if qualified staff cannot be recruited and high process and structural quality levels cannot be ensured. Detrimental effects of childcare have been identified in settings with a relatively low quality of care, which are most evident for children coming from more privileged backgrounds.

about the authors

Nabanita Datta Gupta is a professor of economics at Aarhus University.

Jonas Jessen is a postdoctoral fellow at the Institute of Labor Economics (IZA) in Bonn.