A Structural Model of Childcare, Welfare, and the Labor Supply of Single Mothers
AbstractThis paper considers the simultaneous relationship of the single mother’s decision to choose paid childcare, welfare participation and labor supply, and estimates a structural model that allows for a free error covariance. We use a discrete approach to the choice of labor supply together with the discrete choices of utilized paid childcare and welfare participation, which allow formulating the model as a multiple-choice problem. The results show that there is an association between social assistance, paid childcare and labor supply, but that the relationship is non-symmetric. An increase in the social assistance norms has a relatively small effect on paid childcare utilization, but a relatively larger effect on the mean labor supply. In contrast, a corresponding reduction in the childcare cost has a relatively large effect on the social assistance utilization but a relatively small effect on the mean labor supply. Our estimates suggest that a decrease in childcare cost increases the labor supply of those working rather than encourages non-workers to start work, which implies that childcare cost is foremost a barrier to fulltime work rather then a barrier to work at all.
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Bibliographic InfoPaper provided by University of Gothenburg, Department of Economics in its series Working Papers in Economics with number 82.
Length: 40 pages
Date of creation: 30 Sep 2002
Date of revision:
Publication status: Published in Labour Economics, 2003, pages 133-147.
Note: Published as "The choice of paid childcare, welfare, and labor supply of single mothers" in Labour Economics
Contact details of provider:
Postal: Department of Economics, School of Business, Economics and Law, University of Gothenburg, Box 640, SE 405 30 GÖTEBORG, Sweden
Phone: 031-773 10 00
Web page: http://www.handels.gu.se/econ/
More information through EDIRC
labor supply; paid childcare; welfare participation; structural model; simulated maximum likelihood; Halton draws;
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
This paper has been announced in the following NEP Reports:
- NEP-DCM-2002-10-18 (Discrete Choice Models)
- NEP-LAB-2002-10-18 (Labour Economics)
- NEP-LTV-2002-09-21 (Unemployment, Inequality & Poverty)
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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