ABSTRACT
This paper analyzes the determinants of the choice of childcare mode and the mother’s labor force participation decision. The study is carried out in the context of a well-developed Finnish welfare state with many public policy instruments targeted towards the care of small children. Most previous studies in this area have analyzed choices of childcare mode in quite different settings, where the role of government subsidies to the childcare sector is typically weaker, the informal modes of childcare are more important and the quality of care varies substantially. A partial list includes Blau and Robins (1988), Leibowitz et al. (1988) and Hofferth and Wissoker (1992). A study that is related to a rather similar institutional setting is Gustafsson and Stafford (1992), which analyzes the effects of childcare subsidies in Sweden.
