More childcare today, less poverty tomorrow? A county-level analysis on the effects of childcare availability on poverty in Germany.

This study provides new evidence for the understanding of the consequences of family policies on poverty: we investigate if and to what extent higher childcare availability when the youngest child is aged 0-2 affects household poverty in subsequent years. Unlike prior cross-country research, we focus on within-country variation in childcare availability over 400 German counties using panel data from the Microcensus (2012–2019) linked to local childcare provision data. Our findings show a significant reduction in household poverty risk over and above the mediating role of maternal employment. This effect is notably stronger in Eastern than in Western counties. In Western counties, higher ECEC coverage is associated with poverty declines primarily for single mothers and mothers whose partners work non-standard jobs, while in Eastern counties mostly for mothers with partners employed in standard or non-standard jobs. Poverty risks decrease as children grow older for less affluent households regardless of childcare availability. We conclude that more childcare “today” does improve the economic wellbeing of households with children “tomorrow”. We discuss policy implications arguing that more widespread and substantial poverty reduction cannot be envisaged via higher childcare availability only. This is particularly true in institutional settings promoting the “adult worker model” for mothers against the background of persistent and large gender pay gaps and where the burden of reconciling work and care falls largely on mothers’ shoulders.