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Cheaper Child Care, More Children

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Author Info

  • Eva Mörk

    ()
    (IFAU and Uppsala University)

  • Anna Sjögren

    ()
    (IFAU)

  • Helena Svaleryd

    ()
    (IFN)

Abstract

We study the effect of child care costs on the fertility behavior of Swedish women and find that reductions in child care charges influence fertility decisions, even when costs are initially highly subsidized. Exploiting the exogenous variation in child care costs caused by a Swedish child care reform, we are able to identify the causal effect of child care costs on fertility in a context in which child care enrolment is almost universal and the labor force participation of mothers is very high. A typical household planning another child experienced a reduction in expected future child care costs of SEK 106,000 (USD 17,800). This reduction resulted in 3–5 more child births per 1,000 women during an 18 month period, which corresponds to a 4–6 per cent increase in the birth rate.

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Bibliographic Info

Paper provided by Institut d'Economia de Barcelona (IEB) in its series Working Papers with number 2009/2.

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Length: 40 pages
Date of creation: 2009
Date of revision:
Handle: RePEc:ieb:wpaper:2009/10/doc2009-2

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Keywords: Child Care; Cost of children; Fertility; Quasi-experiment; Difference-in-differences.;

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References

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  1. Joshua Angrist & Victor Lavy & Analia Schlosser, 2010. "Multiple Experiments for the Causal Link between the Quantity and Quality of Children," Journal of Labor Economics, University of Chicago Press, vol. 28(4), pages 773-824, October.
  2. Kevin Milligan, 2005. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," The Review of Economics and Statistics, MIT Press, vol. 87(3), pages 539-555, August.
  3. Elinder, Mikael & Jordahl, Henrik & Poutvaara, Panu, 2008. "Selfish and Prospective: Theory and Evidence of Pocketbook Voting," IZA Discussion Papers 3763, Institute for the Study of Labor (IZA).
  4. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  5. Melissa Schettini Kearney, 2004. "Is There an Effect of Incremental Welfare Benefits on Fertility Behavior?: A Look at the Family Cap," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
  6. Laroque, Guy & Salanié, Bernard, 2003. "Fertility and Financial Incentives in France," CEPR Discussion Papers 4064, C.E.P.R. Discussion Papers.
  7. Alicia Adsera, 2005. "Vanishing Children: From High Unemployment to Low Fertility in Developed Countries," American Economic Review, American Economic Association, vol. 95(2), pages 189-193, May.
  8. Alícia Adserà, 2004. "Changing fertility rates in developed countries. The impact of labor market institutions," Journal of Population Economics, Springer, vol. 17(1), pages 17-43, February.
  9. Daniela Del Boca, 2002. "The effect of child care and part time opportunities on participation and fertility decisions in Italy," Journal of Population Economics, Springer, vol. 15(3), pages 549-573.
  10. Apps, Patricia & Rees, Ray, 2001. "Fertility, Female Labor Supply and Public Policy," IZA Discussion Papers 409, Institute for the Study of Labor (IZA).
  11. Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2008. "How far can reduced childcare prices push female labour supply?," Labour Economics, Elsevier, vol. 15(4), pages 647-659, August.
  12. Francesc Trillas, 2008. "Regulatory federalism in network industries," Working Papers 2008/8, Institut d'Economia de Barcelona (IEB).
  13. Patricia Cort�s & Jos� Tessada, 2011. "Low-Skilled Immigration and the Labor Supply of Highly Skilled Women," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 88-123, July.
  14. Furtado, Delia & Hock, Heinrich, 2008. "Immigrant Labor, Child-Care Services, and the Work-Fertility Trade-Off in the United States," IZA Discussion Papers 3506, Institute for the Study of Labor (IZA).
  15. Ermisch, John F, 1988. "Purchased Child Care, Optimal Family Size and Mother's Employment," CEPR Discussion Papers 238, C.E.P.R. Discussion Papers.
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Citations

Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. Cheaper daycare, more kids
    by Economic Logician in Economic Logic on 2009-04-21 08:33:00
Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
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Cited by:
  1. Angela Luci & Olivier Thévenon, 2012. "The impact of family policy packages on fertility trends in developed countries," Working Papers 174, Institut National d'Études Démographiques (INED).
  2. Eva Garcia-Moran & Zoe Kuehn, 2012. "With Strings Attached: Grandparent-Provided Child care, Fertility, and Female Labor Market Outcomes," CEPRA working paper 1202, USI Università della Svizzera italiana.
  3. REINSTADLER Anne, 2011. "Luxembourg and France: Comparable Family Benefits, Comparable Fertility Levels?," CEPS/INSTEAD Working Paper Series 2011-65, CEPS/INSTEAD.
  4. Boschini, Anne & Håkanson, Christina & Rosén, Åsa & Sjögren, Anna, 2011. "Trading off or having it all? Completed fertility and mid-career earnings of Swedish men and women," Working Paper Series 2011:15, IFAU - Institute for Evaluation of Labour Market and Education Policy.
  5. repec:hal:wpaper:hal-00657603 is not listed on IDEAS
  6. Mohnen, Pierre & Lokshin, Boris, 2009. "What does it take for an R&D tax incentive policy to be effective?," MERIT Working Papers 014, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
  7. Lancker, W. van & Ghysels, J., 2011. "GINI DP 10: Who Reaps the Benefits? The social distribution of public childcare in Sweden and Flanders," GINI Discussion Papers 10, AIAS, Amsterdam Institute for Advanced Labour Studies.
  8. Albert Sole-Olle & Pilar Sorribas-Navarro, 2009. "The dynamic adjustment of local government budgets: Does Spain Behave differently?," Working Papers in Economics 226, Universitat de Barcelona. Espai de Recerca en Economia.
  9. Eva García-Morán & Zoë Kuehn, 2013. "With Strings Attached: Grandparent-Provided Child Care and Female Labor Market Outcomes," SOEPpapers on Multidisciplinary Panel Data Research 610, DIW Berlin, The German Socio-Economic Panel (SOEP).
  10. García-Morán, Eva & Kuehn, Zoe, 2012. "With strings attached: Grandparent-provided child care, fertility, and female labor market outcomes," MPRA Paper 37001, University Library of Munich, Germany.
  11. García-Morán, Eva & Kuehn, Zoe, 2013. "With strings attached: Grandparent-provided child care and female labor market outcomes," MPRA Paper 48953, University Library of Munich, Germany.
  12. repec:hal:wpaper:halshs-00660630 is not listed on IDEAS
  13. Wim Van Lancker & Joris Ghysels, 2011. "Who reaps the benefits? The social distribution of public childcare in Sweden and Flanders," Working Papers 1106, Herman Deleeck Centre for Social Policy, University of Antwerp.

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  1. Economic Logic blog

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