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Childcare Costs and the Demand for Children - Evidence from a Nationwide Reform

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  • Eva Mörk
  • Anna Sjögren
  • Helena Svaleryd

Abstract

Exploiting the exogenous variation in childcare costs caused by a Swedish childcare reform, we are able to identify the causal effect of childcare costs on fertility in a context in which childcare enrollment is almost universal, user fees are low, and the labor force participation of mothers is very high. Anticipation of a reduction in childcare costs increased the number of first births, but only seemed to affect the timing of second births. We find a negative income effect for families with children already enrolled in child care.

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File URL: http://www.cesifo-group.de/portal/page/portal/DocBase_Content/WP/WP-CESifo_Working_Papers/wp-cesifo-2010/wp-cesifo-2010-10/cesifo1_wp3210.pdf
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Bibliographic Info

Paper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3210.

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Date of creation: 2010
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Handle: RePEc:ces:ceswps:_3210

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Keywords: childcare; cost of children; fertility; quasi-experiment; difference-in-differences;

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References

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  1. Daniela Del Boca, 2002. "The effect of child care and part time opportunities on participation and fertility decisions in Italy," Journal of Population Economics, Springer, vol. 15(3), pages 549-573.
  2. Alícia Adserà, 2004. "Changing fertility rates in developed countries. The impact of labor market institutions," Journal of Population Economics, Springer, vol. 17(1), pages 17-43, February.
  3. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
  4. Anders Björklund, 2006. "Does family policy affect fertility?," Journal of Population Economics, Springer, vol. 19(1), pages 3-24, February.
  5. Kevin Milligan, 2002. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," NBER Working Papers 8845, National Bureau of Economic Research, Inc.
  6. Melissa Schettini Kearney, 2002. "Is There an Effect of Incremental Welfare Benefits on Fertility Behavior? A Look at the Family Cap," NBER Working Papers 9093, National Bureau of Economic Research, Inc.
  7. Mikael Elinder & Henrik Jordahl & Panu Poutvaara, 2008. "Selfish and Prospective. Theory and Evidence of Pocketbook Voting," Discussion Papers 40, Aboa Centre for Economics.
  8. Patricia Cort�s & Jos� Tessada, 2011. "Low-Skilled Immigration and the Labor Supply of Highly Skilled Women," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 88-123, July.
  9. Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2008. "How far can reduced childcare prices push female labour supply?," Labour Economics, Elsevier, vol. 15(4), pages 647-659, August.
  10. Alma Cohen & Rajeev Dehejia & Dmitri Romanov, 2007. "Do Financial Incentives Affect Fertility?," NBER Working Papers 13700, National Bureau of Economic Research, Inc.
  11. Apps, Patricia & Rees, Ray, 2001. "Fertility, Female Labor Supply and Public Policy," IZA Discussion Papers 409, Institute for the Study of Labor (IZA).
  12. Alicia Adsera, 2005. "Vanishing Children: From High Unemployment to Low Fertility in Developed Countries," American Economic Review, American Economic Association, vol. 95(2), pages 189-193, May.
  13. Joshua Angrist & Victor Lavy & Analia Schlosser, 2010. "Multiple Experiments for the Causal Link between the Quantity and Quality of Children," Journal of Labor Economics, University of Chicago Press, vol. 28(4), pages 773-824, October.
  14. Makoto Hirazawa & Akira Yakita, 2009. "Fertility, child care outside the home, and pay-as-you-go social security," Journal of Population Economics, Springer, vol. 22(3), pages 565-583, July.
  15. Ermisch, John F, 1989. "Purchased Child Care, Optimal Family Size and Mother's Employment: Theory and Econometric Analysis," Journal of Population Economics, Springer, vol. 2(2), pages 79-102.
  16. Furtado, Delia & Hock, Heinrich, 2008. "Immigrant Labor, Child-Care Services, and the Work-Fertility Trade-Off in the United States," IZA Discussion Papers 3506, Institute for the Study of Labor (IZA).
  17. Robert Moffitt, 2005. "Remarks on the analysis of causal relationships in population research," Demography, Springer, vol. 42(1), pages 91-108, February.
  18. David Blau & Philip Robins, 1989. "Fertility, Employment, and Child-Care Costs," Demography, Springer, vol. 26(2), pages 287-299, May.
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Citations

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Cited by:
  1. Stefan Bauernschuster & Timo Hener & Helmut Rainer, 2013. "Does Expanding Public Child Care Encourage Fertility? County-Level Evidence from Germany," Ifo Working Paper Series Ifo Working Paper No. 158, Ifo Institute for Economic Research at the University of Munich.
  2. Alzúa, María Laura & Cruces, Guillermo & Ripani, Laura, 2012. "Welfare Programs and Labor Supply in Developing Countries: Experimental Evidence from Latin America," IZA Discussion Papers 6959, Institute for the Study of Labor (IZA).
  3. Stefan Bauernschuster & Anita Fichtl & Timo Hener & Helmut Rainer, 2014. "Kinder einer Politikreform: Führen mehr Krippenplätze zu mehr Kindern?," Ifo Schnelldienst, Ifo Institute for Economic Research at the University of Munich, vol. 67(10), pages 30-37, 05.
  4. Bauernschuster, Stefan & Hener, Timo & Rainer, Helmut, 2013. "Does the Expansion of Public Child Care Increase Birth Rates? Evidence from a Low-Fertility Country," Munich Reprints in Economics 20154, University of Munich, Department of Economics.
  5. Nollenberger, Natalia & Rodríguez-Planas, Núria, 2011. "Child Care, Maternal Employment and Persistence: A Natural Experiment from Spain," IZA Discussion Papers 5888, Institute for the Study of Labor (IZA).

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