The Effect of Long-Term-Care Subsidies on Female Labor Supply and Fertility
AbstractFertility and the provision of long-term care are connected by an aspect that has not received attention so far: both are time consuming activities that can be produced within the household or bought at the market and are, thus, connected through the intertemporal budget constraint of the household that accounts for time and money. This paper models that link and analyzes the effect of intervention in the long-term-care market on female labor-market related decisions. It shows that women’s fertility as well as their labor supply when young are affected by such policies. The overall effect can be decomposed into an opportunity-cost effect and a consumption-smoothing effect that each impact fertility as well as labor supply in opposite directions. Using European survey data, the paper shows that the consumption-smoothing effect is dominant.
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Bibliographic InfoPaper provided by CESifo Group Munich in its series CESifo Working Paper Series with number 3931.
Date of creation: 2012
Date of revision:
long-term care; child care; female labor supply; fertility;
Find related papers by JEL classification:
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- D91 - Microeconomics - - Intertemporal Choice and Growth - - - Intertemporal Consumer Choice; Life Cycle Models and Saving
- I13 - Health, Education, and Welfare - - Health - - - Health Insurance, Public and Private
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