Crowding out reciprocity between working parents and companies with corporate childcare

Abstract

When the government and companies invest in childcare, both do it with good intentions. While politicians have the intention of enhancing fertility and well‐being of families, employers expect positive responses from working parents based on the norm of reciprocity. Since industrialized countries increase public family support year by year, the question arises as to whether this may trigger unanticipated consequences. If both the state and companies invest in substitutive services, they might unintentionally spark competition. Therefore, the aim of this study is to examine whether public childcare may “crowd out” the reciprocity effects of corporate childcare on working parents. In Switzerland, state family policies vary among the 26 cantons, so we are able to compare cantons with a high and low number of cantonal childcare services. Using survey data taken from 414 working parents living in different Swiss cantons, we examined whether public childcare affects organizational‐related responses of working parents. First, our results support the expected level of reciprocity: working parents in companies with their own childcare services show higher organizational commitment than parents in companies without this support. Second, we find evidence for a crowding‐out effect: in family‐supportive cantons with numerous public childcare services, working parents’ commitment to companies with their own childcare services is lower than in less family‐friendly cantons. This finding reignites an old economic debate on the crowding out of voluntary private investments due to governmental policies