Family-Friendly Workplace Policies

The literature has studied the willingness to pay for family-friendly amenities, but less is known about the incentives for firms to provide these amenities. This paper examines the incentives for firms to offer family-friendly workplace policies, focusing on firm-provided childcare.

Drawing on German matched employer-employee data combined with detailed survey panel data on firms, we find that firm-provided childcare enhances retention and shortens labor market breaks for mothers, especially for high-wage mothers. It also contributes to employment growth, disproportionately driven by firms attracting female talent.

These findings can be rationalized through a stylized model of imperfect competition in the labor market, where family-friendly workplace policies are modeled as an amenity with direct production benefits.

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