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The Effect of Child Care Costs on the Employment and Welfare Recipiency of Single Mothers

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Author Info

  • Rachel Connelly

    ()
    (Department of Economics, Bowdoin College)

  • Jean Kimmel

    ()
    (Department of Economics, Western Michigan University)

Abstract

This paper considers the effect of child care costs on two labor market outcomes for single mothers—whether to work for pay and whether to receive welfare. Hourly child care expenditures are estimated using data drawn from the 1992 and 1993 panels of the Survey of Income and Program Participation (SIPP). These expenditures are then used to predict the probability of welfare recipiency and employment. While the direction and significance of key variables are robust to changes in specification, the quantitative results are found to be sensitive to identification restrictions. All results show a substantial positive effect of child care costs on welfare recipiency, with the child care price elasticity of welfare recipiency varying from 1.0 to 1.9. Similarly, we find a significant negative effect of child care price on employment with elasticity estimates from ?.3 to ?1.1, showing that controlling for the welfare choice does not reduce the price elasticity of employment found in other studies.

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Bibliographic Info

Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 69 (2003)
Issue (Month): 3 (January)
Pages: 498-519

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Handle: RePEc:sej:ancoec:v:69:3:y:2003:p:498-519

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Web page: http://www.southerneconomic.org/
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Cited by:
  1. Benjamín Villena-Rodán & Cecilia Ríos-Aguilar, 2011. "Causal Effects of Maternal Time-Investment on Children's Cognitive Outcomes," Documentos de Trabajo, Centro de Economía Aplicada, Universidad de Chile 285, Centro de Economía Aplicada, Universidad de Chile.
  2. Herbst, Chris M., 2013. "Universal Child Care, Maternal Employment, and Children's Long-Run Outcomes: Evidence from the U.S. Lanham Act of 1940," IZA Discussion Papers 7846, Institute for the Study of Labor (IZA).
  3. Chris Herbst, 2010. "The labor supply effects of child care costs and wages in the presence of subsidies and the earned income tax credit," Review of Economics of the Household, Springer, Springer, vol. 8(2), pages 199-230, June.
  4. Edwin van Gameren, 2010. "The role of economic incentives and attitudes in participation and childcare decisions," Serie documentos de trabajo del Centro de Estudios Económicos, El Colegio de México, Centro de Estudios Económicos 2010-05, El Colegio de México, Centro de Estudios Económicos.
  5. Davis, Elizabeth E. & Li, NaiChia, 2009. "Regional Variation in Child Care Prices: A Cross-State Analysis," Journal of Regional Analysis and Policy, Mid-Continent Regional Science Association, Mid-Continent Regional Science Association, vol. 39(1).
  6. Cristina Borra, 2010. "Childcare cost and Spanish mother’s labour force participation," Hacienda Pública Española, IEF, IEF, vol. 194(3), pages 9-40, October.
  7. Kimmel, Jean & Connelly, Rachel, 2006. "Is Mothers' Time With Their Children Home Production or Leisure?," IZA Discussion Papers 2058, Institute for the Study of Labor (IZA).
  8. Lincove, Jane Arnold, 2009. "Determinants of schooling for boys and girls in Nigeria under a policy of free primary education," Economics of Education Review, Elsevier, Elsevier, vol. 28(4), pages 474-484, August.
  9. Ashlesha Datar, 2006. "The impact of kindergarten entrance age policies on the childcare needs of families," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 25(1), pages 129-153.
  10. Paula Albuquerque & José Passos, 2010. "Grandparents and women's participation in the labor market," Working Papers Department of Economics, ISEG - School of Economics and Management, Department of Economics, University of Lisbon 2010/16, ISEG - School of Economics and Management, Department of Economics, University of Lisbon.
  11. Robert J. Lemke & Robert Witt & Ann Dryden White, 2007. "The Transition from Welfare to Work," Eastern Economic Journal, Eastern Economic Association, vol. 33(3), pages 359-373, Summer.

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