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Labour supply effects of a cash-for-care subsidy

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  • Pål Schøne

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    Abstract

    From 1999, all parents in Norway with children aged one to three, who did not attend publicly subsidised daycare, became eligible for a cash-for-care (CFC) subsidy. One effect of the CFC-subsidy was to increase in the relative price of external child care. This article analyses whether the CFC-subsidy has led to a reduction in the labour supply of mothers. A framework for evaluating policy reforms when reforms are equally and nation-wide accessible is put forward. The results show that the CFC-subsidy has reduced women’s labour supply. The results are sustained after controlling for contemporaneous macroeconomic shocks, using a triple difference approach. Copyright Springer-Verlag 2004

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    File URL: http://hdl.handle.net/10.1007/s00148-003-0176-8
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    Bibliographic Info

    Article provided by Springer in its journal Population Economics.

    Volume (Year): 17 (2004)
    Issue (Month): 4 (December)
    Pages: 703-727

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    Handle: RePEc:spr:jopoec:v:17:y:2004:i:4:p:703-727

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    Related research

    Keywords: J13; J18; J22; Labour supply; child care; difference-in-differences-in-differences;

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    Cited by:
    1. Leibbrandt, Murray & Lilenstein, Kezia & Shenker, Callie & Woolard, Ingrid, 2013. "The influence of social transfers on labour supply: A South African and international review," SALDRU Working Papers 112, Southern Africa Labour and Development Research Unit, University of Cape Town.
    2. Black, Sandra & Devereux, Paul J. & Løken, Katrine V. & Salvanes, Kjell G., 2012. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," Discussion Paper Series in Economics 13/2012, Department of Economics, Norwegian School of Economics.
    3. Pierre Lefebvre & Philip Merrigan, 2005. "Low-fee ($5/day/child) Regulated Childcare Policy and the Labor Supply of Mothers with Young Children: a Natural Experiment from Canada," Cahiers de recherche 0508, CIRPEE.
    4. Ross Guest & Nick Parr, 2013. "Family policy and couples’ labour supply: an empirical assessment," Journal of Population Economics, Springer, vol. 26(4), pages 1631-1660, October.
    5. Pierre Lefebvre & Philip Merrigan, 2005. "The Québec’s Experiment of $5 per Day per Child Childcare Policy and Mother’s Labour Supply: Evidence Based on the Five Cycles of the NLSCY," CIRANO Project Reports 2005rp-21, CIRANO.
    6. Pierre Lefebvre & Philip Merrigan & Matthieu Verstraete, 2008. "Dynamic Labour Supply Effects of Childcare Subsidies: Evidence from a Canadian Natural Experiment on Low-Fee Universal Child Care," Cahiers de recherche 0824, CIRPEE.

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