The Stakeholder Validation Workshop on “Research on Improving Access to Affordable Childcare for Low-Income Women in Addis Ababa: Impact Evaluation of Demand-Side Interventions” was held on 29 October 2026 at Haile Grand Hotel, Addis Ababa. Organized jointly by the Policy Studies Institute (PSI), the Center for Global Development (CGD), and Mercy Corps Ethiopia, the workshop commenced with registration, followed by opening remarks from H.E. Fekadu Tsega, Director General of PSI, and Edwin Kura, Director of Mercy Corps Ethiopia. Melaknesh Ayele of Mercy Corps Ethiopia presented an overview of the project and its demand- and supply-side interventions. Biniam Bedasso of CGD and Ermias Gebru of PSI subsequently presented the preliminary findings of the impact evaluation of the voucher-based childcare intervention. The presentations were followed by a stakeholder discussion, providing participants with an opportunity to exchange views and reflect on the research findings and their policy implications. H.E. Fekadu Tsega delivered the closing remarks, after which participants attended lunch.
H.E. Mr. Fekadu Tsega, Director General of the Policy Studies Institute (PSI), welcomed participants to the stakeholder validation workshop and expressed his appreciation for their participation and shared commitment to advancing evidence-informed policies and programmes that address Ethiopia’s development challenges. He also extended his gratitude to the Center for Global Development (CGD) and Mercy Corps Ethiopia for their collaboration and contributions to the research initiative.
In his remarks, he emphasized that access to affordable, quality childcare is closely linked to women’s economic empowerment, child development, and social protection. He noted that the lack of accessible and affordable childcare particularly constrains low-income women’s ability to participate in employment, sustain economic activities, and improve their household livelihoods. He further highlighted that quality childcare contributes to children’s early development and wellbeing while promoting inclusive economic growth, gender equality, and human capital development. Recognizing the Government of Ethiopia’s ongoing efforts to expand childcare and early childhood development services, he underscored the importance of research in identifying barriers, evaluating interventions, and informing policies that respond to the needs of low-income households.
H.E. Mr. Fekadu also highlighted the collaborative research project entitled “Improving Access to Affordable Childcare for Low-Income Women in Addis Ababa: Impact Evaluation of Demand-Side Interventions,” being implemented by PSI in partnership with CGD and Mercy Corps Ethiopia. He explained that the study evaluates a voucher-based intervention designed to reduce financial barriers to formal childcare services and uses a randomized controlled trial to examine whether childcare subsidies improve women’s economic participation. He further noted that the study includes women from both refugee and host communities, with the aim of generating evidence on childcare access and its broader economic and social implications for vulnerable populations.
Emphasizing the purpose of the workshop, he described it as an important platform for presenting preliminary findings, gathering stakeholder perspectives, and discussing the implications of the research for policy and practice. He encouraged government institutions, development partners, researchers, and other participants to critically examine the findings, share their experiences, and provide practical recommendations to strengthen the study’s analysis and inform sustainable policy responses. He reaffirmed PSI’s commitment to conducting rigorous policy research and strengthening collaboration among researchers, policymakers, and implementing institutions to ensure that evidence translates into effective policies and meaningful improvements in people's lives.
In closing, H.E. Mr. Fekadu thanked CGD, Mercy Corps Ethiopia, and all institutions and individuals involved in the research. He expressed his hope for productive discussions and valuable insights from the workshop and officially declared the stakeholder validation workshop open.
The presentation provided an overview of the Childcare and Livelihood Project, which aims to improve the wellbeing and future prospects of vulnerable families by addressing systemic gaps in childcare services and economic development. Funded by the Conrad N. Hilton Foundation, the project is being implemented in Addis Ababa from September 2024 to December 2026, targeting 7,000 low-income women from host communities, refugee populations, and internally displaced communities.
The presentation highlighted that limited access to childcare services, the high cost of existing childcare centres, and the disproportionate unpaid care burden on low-income women constitute major barriers to women's economic participation. To address these challenges, the project adopted a partnership-based approach, bringing together public and private stakeholders, facilitating market mapping, identifying childcare centres, aligning incentives for service providers and beneficiaries, and strengthening the capacities of implementing partners.
A major intervention involved improving access to affordable childcare through a subsidized voucher system implemented in collaboration with Awash Bank. Through this initiative, 495 low-income mothers accessed childcare services using vouchers over a seven-month period. Of these, 224 mothers began contributing 50% of the childcare payment during the final two months, while 52 mothers started covering the full cost. The presentation indicated that the voucher intervention strengthened the connection between demand for childcare and service provision, improved service delivery, and supported mothers' access to employment opportunities.
The presentation further outlined capacity-building interventions targeting childcare providers, caregivers, and low-income women. Under the caregiver and nanny training component, implemented in collaboration with Efoy Nanny, 84 participants successfully completed training. These included 59 caregivers from host communities associated with 32 childcare centres and 25 refugees. The training covered ethics, communication, teamwork, infection prevention and hygiene, child development, age-appropriate play, first aid, and support for children with special needs.
In addition, the project provided Business Development Services (BDS) and advisory support through SAK and Kilimanjaro, focusing on business mindsets, entrepreneurship, marketing management, customer service, human resource management, record keeping, and financial management. The presentation reported that 32 administrative staff from 32 childcare centres accessed business development and advisory services. Through collaboration with Awash Bank, 28 childcare centres also received business development and financial literacy training to strengthen their capacity to access financial services, including loans.
The project also promoted financial inclusion among low-income women. Through the BDS, financial literacy, and access-to-finance interventions, 181 self-employed low-income women received support to strengthen their business and financial management capacities and improve their readiness to access financing. Furthermore, in collaboration with Hahu Jobs and Emebet Jobs, the project facilitated skills development and job-matching opportunities. The presentation indicated that 13% of voucher-supported low-income mothers also accessed job-readiness training and employment-matching services.
Overall, the presentation demonstrated how the Childcare and Livelihood Project combines subsidized childcare, capacity development, financial inclusion, and employment support to address interconnected barriers facing low-income women. It emphasized the importance of strengthening partnerships among childcare centres, financial institutions, training providers, and employment-service organizations to improve childcare access and expand women's livelihood opportunities.
At the Stakeholder Validation Workshop , a presentation was delivered on the research project examining the impact of affordable childcare on women’s employment, household welfare, and child development. The presentation highlighted the growing importance of childcare services amid Addis Ababa’s rapid urban transformation, noting that women’s employment remains considerably lower than men’s and that childcare responsibilities and costs constrain women’s participation in the labour market. It explained that limited access to affordable childcare creates a cycle of low supply, high fees, reduced access, and lower household income, further weakening demand for childcare services. Drawing on evidence from other African countries, the presentation highlighted the potential of childcare vouchers and subsidies to improve women’s employment and household welfare, while emphasizing the limited evidence available on urban African settings, particularly regarding refugees and childcare providers’ responses.
The presentation introduced a joint impact evaluation by the Policy Studies Institute (PSI), the Center for Global Development (CGD), and Mercy Corps Ethiopia, examining the effects of childcare vouchers for low-income mothers from both host and refugee communities. The intervention complemented Mercy Corps’ existing livelihoods and childcare programme, which also supports childcare providers. Developed in consultation with relevant Addis Ababa City Administration offices and the Refugees and Returnees Service, the programme aimed to assess whether removing childcare fees could increase childcare utilization and maternal employment, improve mothers’ psychological wellbeing and children’s development, and stimulate the supply of affordable childcare services.
Regarding implementation, the presentation explained that 42 childcare centres were initially shortlisted, offering 788 voucher places, with the vouchers covering the full agreed monthly childcare fees. The intervention was administered through a digital platform developed in collaboration with Awash International Bank, which facilitated direct payments to participating centres. The study employed an individual-level randomized controlled trial involving 1,240 low-income households across 30 catchments in nine sub-cities, comprising 636 households offered vouchers and 604 assigned to the control group. Of these, 1,106 households, representing 89 percent of the original sample, were re-interviewed at endline. Data collection covered household characteristics, childcare arrangements, voucher uptake, maternal employment, working hours, earnings, time use, mental wellbeing, and child development. The study also surveyed 56 childcare centres to assess enrolment, capacity, staffing, fees, costs, and their experiences with the voucher programme.
The presentation further outlined the characteristics of participating households, indicating that mothers were approximately 30 years old on average, with around six years of schooling. About 71 percent were married, while baseline employment stood at approximately 38–43 percent across the two study groups. Most households consisted of four members and had one child within the eligible age range. Regarding programme uptake, 85 percent of households assigned to the voucher group were offered a voucher during the first month, while 62 percent enrolled their children using the voucher. Reasons for non-uptake included reduced childcare capacity, delays, fee increases, and centre closures on the supply side, as well as limited resources for food and sanitary supplies, distance to childcare centres, and spouses’ refusal on the household side.
Overall, the presentation highlighted the importance of evaluating both the demand- and supply-side dimensions of affordable childcare interventions. It emphasized that the effectiveness and potential scalability of childcare vouchers depend not only on reducing costs for low-income mothers but also on the capacity, affordability, accessibility, and quality of childcare services. The findings were expected to provide evidence to inform the City Administration’s childcare and early childhood development policies, strengthen private-sector childcare provision, and identify practical approaches to improving women’s economic participation and family wellbeing.
At the Stakeholder Validation Workshop , the research team presented the findings of the impact evaluation examining the effects of childcare vouchers on low-income mothers’ employment, household welfare, and children’s development. The findings showed that the voucher intervention substantially increased childcare utilization, raising current attendance by 51.8 percentage points compared with the control group. The presentation further demonstrated that access to subsidized childcare increased mothers’ employment or self-employment by 10.7 percentage points, from 56.5 percent to 67.3 percent, and increased average weekly working hours by 3.7 hours. Among mothers whose children attended childcare through the voucher programme, the estimated effects were even higher, with employment increasing by 20.7 percentage points and weekly working hours by seven hours. However, the increase in earnings was approximately four percent and was not statistically significant.
The presentation indicated that the additional employment opportunities were concentrated primarily in wage employment, particularly in domestic work and other low-paid service sectors. This helped explain why increased employment and working hours had not yet translated into substantial earnings gains. The employment effects were also found to be greater among married women, with an increase of 13.8 percentage points, compared with 3.3 percentage points among unmarried women. The estimated effect among host-community mothers was 11.4 percentage points, while the result for refugee households was less conclusive because of the small sample and limited number of catchments. The evaluation also examined broader household and child outcomes. Although maternal psychological wellbeing and intra-household agency showed positive but statistically insignificant changes, no detectable improvement in child development was observed within the six-month evaluation period. The presentation also reported a 3.2-percentage-point decline in the proportion of women who remained married among those married at baseline, while noting that the underlying mechanism was not established.
On childcare access, the findings showed that removing fees reduced the importance of cost as a barrier, although other constraints remained, including distance, service hours, voucher administration, childcare availability, and household preferences. The presentation also highlighted supply-side challenges, indicating that participating centres accommodated increased enrolment largely through existing staff and facilities rather than expanding their physical capacity or workforce. Consequently, child-to-caregiver ratios increased, while childcare fees rose by 61 percent at voucher-participating centres, compared with 35 percent at non-participating centres. These findings suggested that providers faced capacity and financial constraints that limited their ability to respond sustainably to increased demand.
Regarding cost-effectiveness and scalability, the presentation explained that childcare affordability remained a significant concern, particularly for mothers entering low-paid employment. While mothers who started working earned a median monthly income of ETB 4,000, prevailing childcare fees could absorb a substantial share of their earnings. The lowest-earning group, with median monthly earnings of approximately ETB 2,000, would require a full subsidy, whereas middle- and higher-income groups could potentially contribute through a graduated subsidy arrangement. The presentation further estimated that the first-year earnings gains would recover approximately one-fifth of the programme’s subsidy expenditure, while emphasizing that longer-term employment, wage growth, child development benefits, and wider social returns could increase the programme’s overall value.
Based on these findings, the research team proposed a set of policy recommendations for scaling up affordable childcare. These included introducing a graduated voucher system, providing full subsidies at entry and reducing the subsidy to 50 percent once mothers become employed, while maintaining full support for the lowest-income group. The presentation also recommended expanding lower-cost childcare options, particularly day-mother and community-based centres, strengthening provider capacity through grants and training, establishing minimum quality and staffing standards, and ensuring timely payments to childcare centres. It further emphasized the importance of linking demand-side subsidies with supply-side investments, addressing additional costs such as meals and supplies, and improving the accessibility and administration of childcare services.
In conclusion, the presentation underscored that affordable childcare can contribute significantly to women’s labour-market participation, but sustainable results require more than subsidizing demand. The research team emphasized the need for an integrated approach that expands affordable childcare supply, maintains service quality, and ensures financial sustainability. Participants were invited to discuss implementation challenges, beneficiary selection and equity at sub-city and woreda levels, adaptations to the needs of refugee communities, and alignment with the government’s early childhood development and job creation strategies.