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Partnered women's labour supply and child care costs in Australia: Measurement error and the child care price

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Author Info

  • Xiaodong Gong

    ()
    (NATSEM, University of Canberra)

  • Robert Breunig
  • Anthony King

Abstract

We show that measurement error in the constructed price of child care can explain why previous Australian studies have found partnered women’s labour supply to be unresponsive to child care prices. Through improved data and improved construction of the child care price variable, we find child care price elasticities that are statistically significant, negative and in line with elasticities found in other developed countries.

(This abstract was borrowed from another version of this item.)

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File URL: http://www.natsem.canberra.edu.au/files/download?id=739
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Bibliographic Info

Paper provided by University of Canberra, National Centre for Social and Economic Modelling in its series NATSEM Working Paper Series with number 11/13.

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Length: 34 pages
Date of creation: Sep 2011
Date of revision:
Publication status: Published as a NATSEM Working Paper series
Handle: RePEc:cba:wpaper:wp1113

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Postal: University of Canberra, ACT 2601
Phone: +61 2 (02) 6201 2750
Fax: +61 2 (02) 6201 2751
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Web page: http://www.natsem.canberra.edu.au/
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Keywords: Labour Supply; Child Care;

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References

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  1. Blau, David & Currie, Janet, 2006. "Pre-School, Day Care, and After-School Care: Who's Minding the Kids?," Handbook of the Economics of Education, Elsevier.
  2. Denise Doiron & Guyonne Kalb, 2004. "Demands for Childcare and Household Labour Supply in Australia," Melbourne Institute Working Paper Series wp2004n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  3. Rammohan, Anu, 2004. "Child care and female employment decisions: A theoretical note," Working Papers 3, University of Sydney, School of Economics.
  4. Blau, David M & Robins, Philip K, 1988. "Child-Care Costs and Family Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 374-81, August.
  5. Stephen Whelan & Anu Rammohan, 2005. "Child Care and Female Decisions," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(2), pages 203-225, June.
  6. Connelly, Rachel, 1992. "The Effect of Child Care Costs on Married Women's Labor Force Participation," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 83-90, February.
  7. Breunig, Robert & Cobb-Clark, Deborah A. & Gong, Xiaodong, 2005. "Improving the Modeling of Couples' Labour Supply," IZA Discussion Papers 1773, Institute for the Study of Labor (IZA).
  8. Katharina Wrohlich, 2011. "Labor Supply and Child Care Choices in a Rationed Child Care Market," Discussion Papers of DIW Berlin 1169, DIW Berlin, German Institute for Economic Research.
  9. Ribar, D.C., 1993. "A Structural Model of Child Care and the Labor Supply of Married Women," Papers 5-93-1, Pennsylvania State - Department of Economics.
  10. David C. Ribar, 1992. "Child Care and the Labor Supply of Married Women: Reduced Form Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 134-165.
  11. Robert Breunig & Joseph Mercante, 2009. "The accuracy of predicted wages of the non-employed and implications for policy simulations from structural labour supply models," Treasury Working Papers 2009-03, Treasury, Australian Government, revised Mar 2009.
  12. Xiaodong Gong & Robert Breunig & Anthony King, 2010. "How responsive is female labour supply to child care costs - new Australian estimates," Treasury Working Papers 2010-03, Treasury, Australian Government, revised Apr 2010.
  13. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
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  15. Jean Kimmel, 1998. "Child Care Costs As A Barrier To Employment For Single And Married Mothers," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 287-299, May.
  16. Anu Rammohan & Stephen Whelan, 2007. "The Impact Of Childcare Costs On The Full-Time/Part-Time Employment Decisions Of Australian Mothers," Australian Economic Papers, Wiley Blackwell, vol. 46(2), pages 152-169, 06.
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  18. Tom Kornstad & Thor Thoresen, 2007. "A discrete choice model for labor supply and childcare," Journal of Population Economics, Springer, vol. 20(4), pages 781-803, October.
  19. Lisa M. Powell, 2002. "Joint Labor Supply and Childcare Choice Decisions of Married Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 106-128.
  20. Susan L. Averett & H. Elizabeth Peters & Donald M. Waldman, . "Tax Credits, Labor Supply, and Child Care," University of Chicago - Population Research Center 92-9a, Chicago - Population Research Center.
  21. Guyonne Kalb & Wang-Sheng Lee, 2008. "Childcare Use And Parents' Labour Supply In Australia ," Australian Economic Papers, Wiley Blackwell, vol. 47(3), pages 272-295, 09.
  22. Charles Michalopoulos & Philip K. Robins & Irwin Garfinkel, 1992. "A Structural Model of Labor Supply and Child Care Demand," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 166-203.
  23. Naci Mocan, 2007. "Can consumers detect lemons? An empirical analysis of information asymmetry in the market for child care," Journal of Population Economics, Springer, vol. 20(4), pages 743-780, October.
  24. Robert Breunig & Andrew Weiss & Chikako Yamauchi & Xiaodong Gong & Joseph Mercante, 2011. "Child Care Availability, Quality and Affordability: Are Local Problems Related to Labour Supply?," The Economic Record, The Economic Society of Australia, vol. 87(276), pages 109-124, March.
  25. Patricia M. Anderson & Phillip B. Levine, 1999. "Child Care and Mothers' Employment Decisions," JCPR Working Papers 64, Northwestern University/University of Chicago Joint Center for Poverty Research.
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Citations

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Cited by:
  1. Barbara Hanel & Guyonne Kalb & Anthony Scott, 2012. "Nurses' Labour Supply Elasticities: The Importance of Accounting for Extensive Margins," Melbourne Institute Working Paper Series wp2012n09, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  2. Apps, Patricia & Kabátek, Jan & Rees, Ray & van Soest, Arthur, 2012. "Labor Supply Heterogeneity and Demand for Child Care of Mothers with Young Children," IZA Discussion Papers 7007, Institute for the Study of Labor (IZA).
  3. Gong, Xiaodong & Breunig, Robert, 2012. "Child Care Assistance: Are Subsidies or Tax Credits Better?," IZA Discussion Papers 6606, Institute for the Study of Labor (IZA).

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