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Bauernschuster, Stefan; Hener, Timo and Rainer, Helmut (2013): Does Expanding Public Child Care Encourage Fertility? County-Level Evidence from Germany. Ifo Working Paper,

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Germany has the lowest birth rate among all OECD countries. To encourage fertility,the federal government has recently introduced a set of reforms that led to a substantialexpansion of public child care for under three year old children. Using administrativecounty-level data, we exploit within-county variation in this expansion and find evidencethat the provision of public child care causes an increase in birth rates. Extendedempirical specifications suggest that our results are neither confounded by selectivemigration nor driven by tempo effects. Our analysis therefore provides some firstevidence that low fertility may be reversed through changes in public policy that allowwomen to combine employment and motherhood.

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