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Child Care Costs and Mothers’ Labor Supply: An Empirical Analysis for Germany

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Author Info
Katharina Wrohlich

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Abstract

This study analyzes the effect of child care costs on the labor supply of mothers with preschool children in Germany using data from the German Socio-Economic Panel (2002). Child care costs are estimated on the basis of a sample selection model. A structural household utility model, which is embedded in a detailed tax-benefit model, is used for labor supply estimation. In contrast to a previous German study, I find significant effects of child care costs on mother’s labor supply. Compared to other countries such as the US, Canada or the UK, the effects are rather small, which can be explained by the fact that child care costs are already heavily subsidized in Germany.

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Paper provided by DIW Berlin, German Institute for Economic Research in its series Discussion Papers of DIW Berlin with number 412.

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Length: 25 p.
Date of creation: 2004
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Handle: RePEc:diw:diwwpp:dp412

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Related research
Keywords: Child care costs; Labor supply estimation;

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Find related papers by JEL classification:
J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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References listed on IDEAS
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.:
  1. Susan L. Averett & H. Elizabeth Peters & Donald M. Waldman, 1997. "Tax Credits, Labor Supply, And Child Care," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 125-135, February. [Downloadable!] (restricted)
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  2. Michaela Kreyenfeld & Karsten Hank, 1999. "The Availability of Child Care and Mothers' Employment in West Germany," Discussion Papers of DIW Berlin 191, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  3. Viktor Steiner & Katharina Wrohlich, 2004. "Household Taxation, Income Splitting and Labor Supply Incentives: A Microsimulation Study for Germany," Discussion Papers of DIW Berlin 421, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  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. [Downloadable!] (restricted)
  5. Ribar, D.C., 1990. "Child Care And The Labor Supply Of Married Women: Reducted Form Evidence," Papers 9-90-9, Pennsylvania State - Department of Economics.
  6. Heckman, James J, 1979. "Sample Selection Bias as a Specification Error," Econometrica, Econometric Society, vol. 47(1), pages 153-61, January. [Downloadable!] (restricted)
  7. Peter Haan, 2004. "Discrete Choice Labor Supply: Conditional Logit vs. Random Coefficient Models," Discussion Papers of DIW Berlin 394, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  8. 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.
  9. Lisa M. Powell, 1997. "The Impact of Child Care Cost on the Labour Supply of Married Mothers: Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 577-94, August. [Downloadable!] (restricted)
  10. Ribar, David C, 1995. "A Structural Model of Child Care and the Labor Supply of Married Women," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 558-97, July. [Downloadable!] (restricted)
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  11. Gordon Cleveland & Morley Gunderson & Douglas Hyatt, 1996. "Child Care Costs and the Employment Decision of Women: Canadian Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 132-51, February. [Downloadable!] (restricted)
  12. Viktor Steiner & Katharina Wrohlich, 2004. "Work Incentives and Labor Supply Effects of the 'Mini-Jobs Reform' in Germany," Discussion Papers of DIW Berlin 438, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  13. 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. [Downloadable!] (restricted)
  14. Patricia M. Anderson & Philip B. Levine, 1999. "Child Care and Mothers' Employment Decisions," NBER Working Papers 7058, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  15. Wenjui Han & Jane Waldfogel, 2001. "Child Care Costs and Women's Employment: A Comparison of Single and Married Mothers With Pre-School-Aged Children," Social Science Quarterly, The Southwestern Social Science Association, vol. 82(3), pages 552-568. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Katharina Wrohlich, 2005. "The Excess Demand for Subsidized Child Care in Germany," Discussion Papers of DIW Berlin 470, DIW Berlin, German Institute for Economic Research. [Downloadable!]
    Other versions:
  2. Daniela Del Boca & Daniela Vuri, 2006. "The Mismatch between Employment and Child Care in Italy: the Impact of Rationing," CHILD Working Papers wp08_06, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY. [Downloadable!]
    Other versions:
  3. Daniela Del Boca & Daniela Vuri, 2005. "Labor Supply and Child Care Costs: The Effect of Rationing," IZA Discussion Papers 1779, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
  4. Anzelika Zaiceva, 2007. "East-West Migration and Gender: Is there a "Double Disadvantage" vis-à-vis Stayers?," IZA Discussion Papers 2810, Institute for the Study of Labor (IZA). [Downloadable!]
  5. A. Zaiceva, 2007. "East-West migration and gender: Is there a "double disadvantage" vis-à-vis stayers?," Working Papers 608, Dipartimento Scienze Economiche, Universita' di Bologna. [Downloadable!]
  6. Beate Grundig, 2008. "Why is the share of women willing to work in East Germany larger than in West Germany? A logit model of extensive labour supply decision," Ifo Working Paper Series Ifo Working Paper No. 56, Ifo Institute for Economic Research at the University of Munich. [Downloadable!]
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This page was last updated on 2009-11-28.


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