Daycare Subsidies and Labor Supply in Sweden
AbstractThe provision of subsidized child care may encourage women to participate in the paid labor force. This paper analyzes the effects of the price and availability of subsidized child care on labor force participation, using data from a Swedish household survey for 1984 in combination with data on public day care fees and spaces per child by community. We argue that the subsidy rate and availability of spaces determined by the political leaders of the community is to a large extent exogenous to the household. The joint out-of-home child care and labor supply decision is analyzed by logit-choice models. We find that the provision of high quality public day care in Sweden encourages the labor market activity of women with preschoolers, even when a spouse's income is high, and that when spaces are not rationed a lower price encourages use. This is consistent with the predictions of our theoretical model.
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Bibliographic InfoPaper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 279.
Date of creation: Oct 1988
Date of revision:
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Other versions of this item:
- Gustafsson, Siv & Stafford, Frank, 1989. "Daycare Subsidies and Labor Supply in Sweden," Working Paper Series, Research Institute of Industrial Economics 221, Research Institute of Industrial Economics.
- H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
- H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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