An experimental study looking at the effects of providing free childcare for poor urban mothers in Nicaragua under the 'Programo Urbano', looking at the effects on inequality for mothers and children.
It finds that providing free childcare for young children of poor mothers significantly increases the employment probability of the mothers (14ppts) independently of the childcare quality.
It also finds significantly positive impacts on the human capital of the children, though dependent on the quality of childcare facilities.
This suggests childcare costs being removed through a quasi-subsidy reducing the required childcare time burden on mothers, increasing parental agency and employment choices.
Some limitations to the study include a relatively small overall sample size, as well as employment effects becoming insignificant when the effect is measured on randomization alone (without an additional instrumental variable).
