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Full Childcare Coverage: Higher Maternal Labour Supply and Childcare Usage?

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  • Vanleenhove, Pieter
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    Abstract

    According to many studies, childcare is an important input for children’s development but it is also used to free up time for parents to work. However, many households are still confronted with availability constraints in childcare. In the recent past, many governments implemented policy reforms in order to increase the coverage rate of childcare. The empirical part of this paper focuses on the Flemish childcare market and analyzes how maternal labour supply and childcare usage is affected by a new Flemish decree which provides full childcare coverage. This paper adopts a modeling framework for analyzing labour supply developed by Aaberge, Colombino and Strøm (1999) and Dagsvik (1994). To account for the possible interaction between labour supply and childcare choices the model also treats childcare type as an endogenous variable. The results of the policy reform analysis show that households switch to formal childcare when confronted with higher childcare availability. Total labour supply also increases but these effects are less pronounced as some households also reduce working hours.

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    Bibliographic Info

    Paper provided by EUROMOD at the Institute for Social and Economic Research in its series EUROMOD Working Papers with number em19/13.

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    Date of creation: 14 Nov 2013
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    Publication status: published
    Handle: RePEc:ese:emodwp:em19-13

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    1. Guyonne Kalb, 2007. "Children, Labour Supply and Childcare: Challenges for Empirical Analysis," Melbourne Institute Working Paper Series, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne wp2007n15, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    2. Bargain, Olivier & Orsini, Kristian, 2004. "In-Work Policies in Europe: Killing Two Birds with One Stone?," IZA Discussion Papers 1445, Institute for the Study of Labor (IZA).
    3. R. Aaberge & U. Colombino & T. Wennemo, 2009. "Evaluating Alternative Representations Of The Choice Sets In Models Of Labor Supply," Journal of Economic Surveys, Wiley Blackwell, Wiley Blackwell, vol. 23(3), pages 586-612, 07.
    4. Sutherland, Holly & Figari, Francesco, 2013. "EUROMOD: The European Union Tax-Benefit Microsimulation Model," EUROMOD Working Papers EM8/13, EUROMOD at the Institute for Social and Economic Research.
    5. Arrufat, Jose Luis & Zabalza, Antonio, 1986. "Female Labor Supply with Taxation, Random Preferences, and Optimization Errors," Econometrica, Econometric Society, Econometric Society, vol. 54(1), pages 47-63, January.
    6. Ylenia Brilli & Daniela Del Boca & Chiara Pronzato, 2011. "Exploring the Impacts of Public Childcare on Mothers and Children in Italy: Does Rationing Play a Role?," Working Papers, Human Capital and Economic Opportunity Working Group 2011-038, Human Capital and Economic Opportunity Working Group.
    7. Haan, Peter & Wrohlich, Katharina, 2009. "Can Child Care Policy Encourage Employment and Fertility? Evidence from a Structural Model," IZA Discussion Papers 4503, Institute for the Study of Labor (IZA).
    8. André Decoster & Kristian Orsini & Guy Van Camp, 2006. "Stop the grief and back to work! An evaluation of the government's plan to activate widows and widowers," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, ULB -- Universite Libre de Bruxelles, vol. 49(2), pages 121-145.
    9. Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
    10. Tom Kornstad & Thor Thoresen, 2007. "A discrete choice model for labor supply and childcare," Journal of Population Economics, Springer, Springer, vol. 20(4), pages 781-803, October.
    11. Aaberge, Rolf & Colombino, Ugo & Strom, Steinar, 1999. "Labour Supply in Italy: An Empirical Analysis of Joint Household Decisions, with Taxes and Quantity Constraints," Journal of Applied Econometrics, John Wiley & Sons, Ltd., John Wiley & Sons, Ltd., vol. 14(4), pages 403-22, July-Aug..
    12. André Decoster & Pieter Vanleenhove, 2012. "In-Work Tax Credits in Belgium :An Analysis of the Jobkorting Using a Discrete Labour Supply Model," Brussels Economic Review, ULB -- Universite Libre de Bruxelles, ULB -- Universite Libre de Bruxelles, vol. 55(2), pages 121-150.
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