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The Effect of an Alternative Childcare Subsidy on Labour Supply: A Policy Simulation

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  • Guyonne Kalb

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

  • Wang-Sheng Lee

    ()
    (Melbourne Institute of Applied Economic and Social Research, The University of Melbourne)

Abstract

Based on labour supply parameter estimates and childcare demand parameters for the Australian population in 2002, this paper illustrates how an extended childcare subsidy proposed by the Taskforce on Care Costs in October 2006 can be evaluated using a microsimulation model. First, the cost to the government is predicted assuming unchanged labour supply behaviour. Then the labour supply effects of the TOCC proposal are predicted for single parents and couple families separately, including a revised cost/benefit analysis which takes the labour supply responses into account.

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Bibliographic Info

Paper provided by Melbourne Institute of Applied Economic and Social Research, The University of Melbourne in its series Melbourne Institute Working Paper Series with number wp2007n14.

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Length: 21 pages
Date of creation: Apr 2007
Date of revision:
Handle: RePEc:iae:iaewps:wp2007n14

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Postal: Melbourne Institute of Applied Economic and Social Research, The University of Melbourne, Victoria 3010 Australia
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Cited by:
  1. Yin King Fok & Sung-Hee Jeon & Roger Wilkins, 2009. "Does Part-Time Employment Help or Hinder Lone Mothers Movements into Full-Time Employment?," Melbourne Institute Working Paper Series wp2009n25, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  2. Guyonne Kalb & Thor Thoresen, 2010. "A comparison of family policy designs of Australia and Norway using microsimulation models," Review of Economics of the Household, Springer, vol. 8(2), pages 255-287, June.
  3. Guyonne Kalb, 2009. "Children, Labour Supply and Child Care: Challenges for Empirical Analysis," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 42(3), pages 276-299.

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