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Labor Supply and Child Care Costs: The Effect of Rationing

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Author Info
Daniela Del Boca () (University of Turin, CHILD and IZA Bonn)
Daniela Vuri () (University of Florence, CHILD and IZA Bonn)

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Abstract

In Italy the participation of women has not increased very much in the last few decades relative to other developed countries and it is still among the lowest in Europe. The female employment rate stands almost 13 percentage points below the EU average and 22 below the Lisbon target. One of the most important reasons is related to the characteristics of child care system. In this paper we analyze the characteristics of the child care system in Italy and its relationship to the labor market participation decision of mothers. We present a simple discrete choice framework in which the two decisions can be jointly considered, which also allows for simple forms of rationing and estimate a bivariate probit model of the child care and employment decisions and interpret the results within the framework of our model. We find evidence that rationing is an important factor in interpreting price effects on utilization rates.

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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1779.

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Length: 41 pages
Date of creation: Sep 2005
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Handle: RePEc:iza:izadps:dp1779

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Related research
Keywords: labor market decisions fertility child care

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Find related papers by JEL classification:
J2 - Labor and Demographic Economics - - Demand and Supply of Labor
C3 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables
D1 - Microeconomics - - Household Behavior

This paper has been announced in the following NEP Reports:

References listed on IDEAS
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.:
  1. Susan L. Averett & H. Elizabeth Peters & Donald M. Waldman, 1997. "Tax Credits, Labor Supply, And Child Care," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 125-135, February. [Downloadable!] (restricted)
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  2. Blau, David M & Robins, Philip K, 1988. "Child-Care Costs and Family Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 374-81, August. [Downloadable!] (restricted)
  3. Ribar, D.C., 1990. "Child Care And The Labor Supply Of Married Women: Reducted Form Evidence," Papers 9-90-9, Pennsylvania State - Department of Economics.
  4. Jean Kimmel, 1998. "Child Care Costs As A Barrier To Employment For Single And Married Mothers," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 287-299, May. [Downloadable!] (restricted)
  5. Maria Chiuri, 2000. "Quality and Demand of Child Care and Female Labour Supply in Italy," LABOUR, CEIS, Fondazione Giacomo Brodolini and Blackwell Publishing Ltd, vol. 14(1), pages 97-118, 03. [Downloadable!] (restricted)
  6. Heckman, James J, 1974. "Effects of Child-Care Programs on Women's Work Effort," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages S136-S163, Part II, . [Downloadable!] (restricted)
  7. Heckman, James J, 1993. "What Has Been Learned about Labor Supply in the Past Twenty Years?," American Economic Review, American Economic Association, vol. 83(2), pages 116-21, May. [Downloadable!] (restricted)
  8. Dehejia, R.H. & Wahba, S., 1998. "Propensity Score Matching Methods for Non-Experimental Causal Studies," Discussion Papers 1998_02, Columbia University, Department of Economics.
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  9. Ermisch, John F, 1989. "Purchased Child Care, Optimal Family Size and Mother's Employment: Theory and Econometric Analysis," Journal of Population Economics, Springer, vol. 2(2), pages 79-102.
  10. Deborah Cobb-Clark & Amy Liu & Deborah Mitchell, 1999. "Reassessing the Role of Child Care Costs in the Work and Care Decisions of Australian Families," Discussion Papers 409, Centre for Economic Policy Research, Research School of Social Sciences, Australian National University. [Downloadable!]
  11. Ribar, David C, 1995. "A Structural Model of Child Care and the Labor Supply of Married Women," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 558-97, July. [Downloadable!] (restricted)
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  12. Rajeev H. Dehejia & Sadek Wahba, 1998. "Causal Effects in Non-Experimental Studies: Re-Evaluating the Evaluation of Training Programs," NBER Working Papers 6586, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  13. Connelly, Rachel, 1992. "The Effect of Child Care Costs on Married Women's Labor Force Participation," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 83-90, February. [Downloadable!] (restricted)
  14. Katharina Wrohlich, 2004. "Child Care Costs and Mothers’ Labor Supply : An Empirical Analysis for Germany," Discussion Papers of DIW Berlin 412, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  15. Del Boca, Daniela & Locatelli, Marilena & Vuri, Daniela, 2004. "Child Care Choices by Italian Households," IZA Discussion Papers 983, Institute for the Study of Labor (IZA). [Downloadable!]
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  1. Katharina Wrohlich, 2006. "Labor Supply and Child Care Choices in a Rationed Child Care Market," IZA Discussion Papers 2053, Institute for the Study of Labor (IZA). [Downloadable!]
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