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Daycare Subsidies and Labor Supply in Sweden

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  • Gustafsson, Siv
  • Stafford, Frank

Abstract

The 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 Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 279.

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Date of creation: Oct 1988
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Handle: RePEc:cpr:ceprdp:279

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Related research

Keywords: Child Care; Children; Households; Labour Supply; Median Voter; Women;

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References

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  1. Becker, Gary S & Lewis, H Gregg, 1973. "On the Interaction between the Quantity and Quality of Children," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S279-88, Part II, .
  2. Blomquist, N. Soren, 1983. "The effect of income taxation on the labor supply of married men in Sweden," Journal of Public Economics, Elsevier, vol. 22(2), pages 169-197, November.
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Cited by:
  1. Dora L. Costa, 2000. "From Mill Town to Board Room: The Rise of Women's Paid Labor," NBER Working Papers 7608, National Bureau of Economic Research, Inc.
  2. Connelly R & Degraff DS & Levison D, 1991. "Child care policy and women's market work in urban Brazil," ILO Working Papers 285802, International Labour Organization.
  3. Klevmarken, Anders, 1989. "Modelling Labor Supply in a Dynamic Economy," Working Paper Series 247, Research Institute of Industrial Economics.
  4. Karen Mason & Karen Kuhlthau, 1992. "The perceived impact of child care costs on women’s labor supply and fertility," Demography, Springer, vol. 29(4), pages 523-543, November.
  5. Edwin van Gameren & Ingrid Ooms, 2009. "Childcare and labor force participation in the Netherlands: the importance of attitudes and opinions," Review of Economics of the Household, Springer, vol. 7(4), pages 395-421, December.

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