How Public Investments in Childcare Mitigate Childbirth Effects on Employment Transitions by Skill Level in Europe

ABSTRACT Public investments in childcare generally improve parents' employment chances, yet evidence on their magnitude, cross‐national variation, and social distribution remains mixed. This study examines how public spending on early childhood education and care (ECEC) moderates post‐childbirth employment attachment across Europe. Using longitudinal EU‐SILC microdata for 26 countries (2003–2020) combined with social policy indicators, multilevel mixed‐effects models trace within‐person employment changes before and 2 years after childbirth by gender, skill level, and country context. Results show that childbirth substantially reduces women's employment probabilities, but higher public ECEC investment mitigates this decline by supporting re‐entry into employment. At above‐average spending levels, employment returns to pre‐childbirth levels within 2 years, whereas recovery remains limited where ECEC investments are lower. The pattern holds across skill groups and welfare regimes, except in the Nordic countries, where low‐skilled mothers benefit more. Findings underscore the role of ECEC investment in sustaining labor force participation in Europe.