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Crowding out Dad? The Effect of a Cash-for-Care Subsidy on Family time Allocation

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  • Drange, Nina

    ()
    (UiS)

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    Abstract

    This paper expands our understanding of possible specialization effects of extended parental leave policies. Identification is based on the introduction of the Cash-for-Care program in Norway in 1998, which increased mothers’ incentives to withdraw from the labor market when their child was one and two years old. I estimate difference-in-differences models exploiting differences in individuals' exposures to the program among families with similar structures. Consistent with Schøne (2004) I find that the cash-for-care program decreased mothers’ labor force participation by about four percentage points. Notably, however, I find no evidence that the fathers work more to compensate for the mothers declined labor supply.

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    File URL: http://dl.dropbox.com/u/8078351/uis_wps_econ_fin/uis_wps_2012_3_drange.pdf
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    Bibliographic Info

    Paper provided by University of Stavanger in its series UiS Working Papers in Economics and Finance with number 2012/3.

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    Length: 35 pages
    Date of creation: 02 Mar 2012
    Date of revision:
    Handle: RePEc:hhs:stavef:2012_003

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    Postal: University of Stavanger, NO-4036 Stavanger, Norway
    Web page: http://www.uis.no/research/economics_and_finance
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    1. Michael Baker & Jonathan Gruber & Kevin Milligan, 2008. "Universal Child Care, Maternal Labor Supply, and Family Well-Being," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 709-745, 08.
    2. Rafael Lalive & Josef Zweimüller, 2009. "How does Parental Leave Affect Fertility and Return to Work? Evidence from Two Natural Experiments," The Quarterly Journal of Economics, MIT Press, vol. 124(3), pages 1363-1402, August.
    3. Schönberg, Uta & Ludsteck, Johannes, 2007. "Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap," IZA Discussion Papers 2699, Institute for the Study of Labor (IZA).
    4. Thor Olav Thoresen & Annette Alstadsæter, 2008. "Shifts in Organizational Form under a Dual Income Tax System," CESifo Working Paper Series 2273, CESifo Group Munich.
    5. Jonah B. Gelbach, 2002. "Public Schooling for Young Children and Maternal Labor Supply," American Economic Review, American Economic Association, vol. 92(1), pages 307-322, March.
    6. Sara Cools & Jon H. Fiva & Lars Johannessen Kirkebøen, 2011. "Causal effects of paternity leave on children and parents," Discussion Papers 657, Research Department of Statistics Norway.
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