Subsidizing private childcare in a universal regime

Abstract All families in Finland have the freedom to choose between subsidized home care, universal public childcare, and private childcare. We study impact of introduction childcare subsidies Finland. Private causal effects on take-up but no care or employment among women with small children. Instead, services seem crowd out a socioeconomic gradient by mother’s education that steepens when subsidy increases. Families’ preferences do not explain result.