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Do reduced child care prices make parents work more?

Author

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  • Lundin, Daniela

    (IFAU - Institute for Labour Market Policy Evaluation)

  • Mörk, Eva

    (IFAU - Institute for Labour Market Policy Evaluation)

  • Öckert, Björn

    (IFAU - Institute for Labour Market Policy Evaluation)

Abstract

This paper exploits exogenous variation in the price of child care stemming from a major child care price reform, to estimate the effects of child care costs on parents’ labour supply. The reform introduced a cap on the price that local governments could charge parents, and lead to considerable reductions in the price of child care depending on family type and region. Since the price is de-termined by a handful of observed characteristics, we are able to match house-holds that are similar in all relevant aspects, but experienced quite different price changes due to the reform. Our difference-in-differences regression matching estimates are very precise, but mostly close to zero.

Suggested Citation

  • Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2007. "Do reduced child care prices make parents work more?," Working Paper Series 2007:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    • Handle: RePEc:hhs:ifauwp:2007_002
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    File URL: http://www.ifau.se/upload/pdf/se/2007/wp07-02.pdf
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    References listed on IDEAS

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    1. Olof Åslund & John Östh & Yves Zenou, 2010. "How important is access to jobs? Old question--improved answer," Journal of Economic Geography, Oxford University Press, vol. 10(3), pages 389-422, May.
    2. Philip de Jong & Maarten Lindeboom & Bas van der Klaauw, 2011. "Screening Disability Insurance Applications," Journal of the European Economic Association, European Economic Association, vol. 9(1), pages 106-129, February.
    3. Söderström, Martin, 2006. "School choice and student achievement – new evidence on open-enrolment," Working Paper Series 2006:16, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Wang, Iris J Y & Carling, Kenneth & Nääs, Ola, 2006. "High school students' summer jobs and their ensuing labour market achievement," Working Paper Series 2006:14, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    5. Bertil Holmlund & Qian Liu & Oskar Nordström Skans, 2008. "Mind the gap? Estimating the effects of postponing higher education," Oxford Economic Papers, Oxford University Press, vol. 60(4), pages 683-710, October.
    6. Johansson, Per, 2006. "Using internal replication to establish a treatment effect," Working Paper Series 2006:3, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    7. Öster, Anna, 2006. "Parental unemployment and children's school performance," Working Paper Series 2006:5, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    8. Johansson, Kerstin, 2006. "Do labor market flows affect labor-force participation?," Working Paper Series 2006:17, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. Anders Forslund & Oskar Nordström Stans, 2006. "Swedish Youth Labour Market Policies Revisited," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 75(3), pages 168-185.
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    Citations

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    Cited by:

    1. van den Berg, Gerard J., 2007. "An Economic Analysis of Exclusion Restrictions for Instrumental Variable Estimation," IZA Discussion Papers 2585, Institute of Labor Economics (IZA).
    2. Mike Brewer, 2007. "Welfare reform in the UK: 1997 - 2007," IFS Working Papers W07/20, Institute for Fiscal Studies.
    3. Bygren, Magnus & Gähler, Michael, 2007. "The gender gap in workplace authority in Sweden 1968-2000 – a family affair?," Working Paper Series 2007:28, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    4. Inés Hardoy & Pål Schøne, 2015. "Enticing even higher female labor supply: the impact of cheaper day care," Review of Economics of the Household, Springer, vol. 13(4), pages 815-836, December.
    5. Lefebvre, Pierre & Merrigan, Philip & Verstraete, Matthieu, 2009. "Dynamic labour supply effects of childcare subsidies: Evidence from a Canadian natural experiment on low-fee universal child care," Labour Economics, Elsevier, vol. 16(5), pages 490-502, October.
    6. Caroline Hall & Laura Hartman, 2010. "Moral hazard among the sick and unemployed: evidence from a Swedish social insurance reform," Empirical Economics, Springer, vol. 39(1), pages 27-50, August.
    7. Russell, Helen & McGinnity, Frances & Fahey, Éamonn & Kenny, Oona, 2018. "Maternal employment and the cost of childcare in Ireland," Research Series, Economic and Social Research Institute (ESRI), number RS73, June.
    8. Forslund, Anders & Johansson, Kerstin, 2007. "Random and stock-flow models of labour market matching - Swedish evidence," Working Paper Series 2007:11, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    9. Annette Bergemann & Gerard J. Van Den Berg, 2008. "Active Labor Market Policy Effects for Women in Europe - A Survey," Annals of Economics and Statistics, GENES, issue 91-92, pages 385-408.

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    More about this item

    Keywords

    Labour supply; price of child care; difference-in-differences regression matching;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure

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