# **<mark>INTRODUCTION</mark>**

<mark>Greater female engagement in the labor market results in a number of benefits for countries</mark> and their residents. Hsieh et al. (2019) show that better allocation of women’s talent across sectors, including leaving the home sector for market work, significantly contributed to the US growth between 1960 and 2010. <mark>Increased growth in female labor income in Latin America between 2000 and 2010 accounted for 28 percent of the reduction in inequality and 30 percent of the reduction in extreme poverty (Diaz and Rodriguez-Chamussy 2016).</mark> In East Asia, increasing female labor force participation (FLFP) has been shown to be more effective in mitigating projected decline in the labor force due to aging population than increased immigration or delayed retirement (World Bank 2016). At the household level, women’s participation in the labor market helps households diversify income sources, allowing them to better insure against risk (Blundell, Pistaferri, and Saporta-Eksten 2016). <mark>However, mothers’ traditional role in caring for children can be an impediment to their labor market engagement. In this paper, we review research that examines how improved access to institutional childcare impacts mothers’ labor market engagement in lower- and middle-income countries: labor force participation (LFP) and employment as well as hours of work, type of employment and income.</mark> <mark>A body of research from upper-income countries has documented that government policy around childcare has effectively contributed to improving women’s labor market outcomes, such as LFP, employment and work hours. (See reviews from Del Boca 2015; Hegewisch and Gornick 2011; Morrissey 2017.) Both the m</mark> acro and micro economic <mark>literature tends to find overall positive effects of subsidized childcare on female and maternal employment in higher income countries, particularly in countries with relatively higher costs of childcare at baseline (Olivetti and Petrongolo 2017). Family-oriented policies (including family subsidies that could be used for childcare) along with labor market institutions (such as employment protection) explain almost 25 percent of the actual increase in LFP for young women in 15 European Union countries (Cipollone, Patacchini, and Vallanti 2014).</mark> <mark>The relationship between maternal labor market outcomes and access to childcare may be different in developing countries. First, the nature of jobs available for women in low- and middle- income countries may be compatible with simultaneously minding children: agricultural work or selling goods at a local market can be done with children alongside. Indeed, Aaronson et. al. (2021) find that fertility, which is proportional to maternal years devoted to childcare, is not significantly related to female labor supply in developing countries, only in developed countries. Examining data from 103 countries (both developed and developing) over 200 years, they conclude that there is greater compatibility of childcare with agriculture. FLFP may be already high in poorer nations due to the rural nature of their economies, and less dependent on availability of childcare services. Aligned with this hypothesis, in a country-level analysis examining differences in preschool enrollment between 1965 and 1980, O’Connor (1988) argues that increases in preschool enrollment are likely driven by increases in women’s participation in industrial and service sectors.</mark> <mark>Second, women’s labor market response to childcare supply or costs depends on the current level of female participation in the labor force (Akgunduz and Plantenga 2018). Thus, in comparison to findings from high income countries, we may expect greater heterogeneity in impacts of childcare across different low- and middle- income countries, given a wider range of initial FLFP levels.</mark> 2