How does early childcare enrollment affect children, parents, and their interactions?

We estimate the effects of childcare enrollment on child outcomes by exploiting a staggered childcare expansion across regions in Japan. We find that childcare improves language development and reduces the symptoms of inattention, hyperactivity, and aggression among the children of low-education mothers. To shed light on underlying mechanisms, we also examined parental outcomes. Estimates indicate that childcare use improves parenting quality and subjective well-being and reduces stress among low-education mothers. Our estimates for marginal treatment effects indicate that children who would benefit most from childcare are less likely to attend, implying inefficient allocation.