As a consequence of increased life expectancies and the overall improved health status of elderly people in industrialized countries, grandparents and grandchildren are now sharing a longer period of their lives together, from which they can both actively benefit. In addition, grandparents help their children by looking after their grandchildren and are consequently an important service provider in the domain of childcare, especially for mothers active in the labour market. The analyses, which are based on the Survey of Health, Aging and Retirement in Europe (Austria, Belgium, Denmark, France, Germany, Greece, Italy, the Netherlands, Spain, Sweden and Switzerland), show significant country differences in the occurrence and intensity of grandchild care in Europe: whereas grandparents in southern Europe engage less often but more intensively in childcare, grandchild care is provided more often but much less intensively in northern Europe. Multilevel logistic regression models show that country-specific differences are associated with welfare state arrangements and, specifically, with public investments in childcare infrastructures. Public investments ‘crowd in’ grandparental willingness to engage in childcare but ‘crowd out’ the intensity of this intergenerational time transfer. Family and state thus complement one another, with grandparents taking over sporadic, less time-intensive care while public institutions provide regular, time-consuming childcare services.