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The contributions in this thesis revolve around mothers' employment and child care quality. The first topic of interest is how mothers' employment is affected by modern child care services and parental leave entitlements. There is already an extensive literature on the effects of modern social policies such as child care services and parental leave entitlements. A related second topic is how child care quality is produced and influenced by policy measures. Positive findings from the UK and USA of targeted intervention programmes such as STAR, Perry Preschool and Sure Start do not prove that large scale investments can have large effects on child development, but they do give an indication of the potential returns to child care policies focused on improving quality. This thesis begins by evaluating the literature linking child care prices to labor supply and attempting to explain the differences in the findings. The previous studies focus mostly on the empirical link between prices and labor supply. The results suggest that the child care prices have become less important in determining mothers’ employment over time. The next chapter covers parental leave, where I provide an aggregate level analysis in terms of employment rates, working hours, occupational segregation and wages, which extends and updates the previous studies using aggregate data. The results are in line with the previous literature; while female employment can be positively affected by parental leave legislation, wages are negative affected. The change in terminology among policymakers and academics from child care to early childhood education and care (ECEC) underlines the transition from viewing child care as a service that facilitates parents employment to one that plays a role in human capital formation. Education in later years have long been studied with regard to how privatization of schools and spending in education affect educational quality. Since there is a general trend towards privatization of welfare state functions including child care services across OECD countries, the same questions analyzed for schooling are becoming more relevant also for the child care sector. I extend the literature on schooling quality to the early childhood years by analyzing how child care quality is affected by competition among centers and by public spending. Just as in schooling, competition seems to have positive effects on child care quality. While the institutional setting of the child care market is crucial, finances still matter. The recent cuts in child care subsidies in the Netherlands would seem to suggest that quality was adversely affected. In the final chapter, I go back to the literature on child care and labor supply and extend it by analyzing how quality influences female labor supply. While the previously noted links between employment, child care prices and wages are found in the empirical model, there does not seem to be any positive effects from high quality child care on employment. Parents may either lack information about child care quality or do not sufficiently value it to adjust their employment behavior according to the quality of available child care services.