Results
In the following section we will report the estimates Bauernschuster & Schlotter and give an interpretation of the effect and its comparision to the other results which were reported in the introductory paragraph.
Results of the IV approach
First of all it is necessary to check the results of the first stage. According to the authors' calculations the first stage is for both specifications (with and without controls) highly significant (F-Test has a value of 30 and 35 respectively) and thereby the authors conclude that the releveance criterion is met in their approach. Using the predicted values for the childcare attendance rate they get estimates which are barely changed by the inclusion of control variables. Assuming linearity of the effects Bauernschuster & Schlotter estimate that a 10 percentage points increase in childcare availability increases the labor market participation of the mothers targeted by the reform by 3.6 to 3.7 percentage points. The amount is considerable but not spectacular and comparable to the other studies which were mentioned above. On the other hand this means that almost two-thirds of the mothers making use of the reform use it for different purposes that taking up a new job.
Given the imprecision of the IV estimates yielding standard errors six times larger than the OLS estimate the authors only can reject the null-hypothesis that at the 10%-level.
Bauernschuster & Schlotter also provide reduced form evidence which they label as Intention-to-treat effect which is significant at the 10%-level and states that the reform increased childcare attendance by slightly more than six percentage points over all mothers which were target of the reform.