We study the effects of child home care allowance that significantly increases parents' incentives to stay home with children under the age of three in Finland. Using a difference-in-differences model that exploits variation in the municipality-specific supplement to the allowance, we investigate the effects of the allowance on children’s outcomes from early childhood until adulthood. Our results show that home care allowance decreases maternal employment and negatively affects the early childhood cognitive test results. On longer term we find that allowance increases youth crimes. However, we do not find any impact on the longer run schooling outcomes. The results are more pronounced in municipalities that have higher average child care quality.