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Cheaper Child Care, More Children

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Author Info

  • Mörk, Eva

    ()
    (Uppsala University)

  • Sjögren, Anna

    ()
    (IFAU)

  • Svaleryd, Helena

    ()
    (Research Institute of Industrial Economics)

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 Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3942.

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Length: 40 pages
Date of creation: Jan 2009
Date of revision:
Handle: RePEc:iza:izadps:dp3942

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Related research

Keywords: child care; cost of children; fertility; quasi-experiment; difference-in-differences;

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References

References listed on IDEAS
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  1. Elinder, Mikael & Jordahl , Henrik & Poutvaara, Panu, 2008. "Selfish and Prospective Theory and Evidence of Pocketbook Voting," Working Paper Series 2008:7, Uppsala University, Department of Economics.
  2. Apps, Patricia & Rees, Ray, 2001. "Fertility, Female Labor Supply and Public Policy," IZA Discussion Papers 409, Institute for the Study of Labor (IZA).
  3. Kevin Milligan, 2002. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," NBER Working Papers 8845, National Bureau of Economic Research, Inc.
  4. 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.
  5. A. Smith, Jeffrey & E. Todd, Petra, 2005. "Does matching overcome LaLonde's critique of nonexperimental estimators?," Journal of Econometrics, Elsevier, vol. 125(1-2), pages 305-353.
  6. Anders Björklund, 2006. "Does family policy affect fertility?," Journal of Population Economics, Springer, vol. 19(1), pages 3-24, February.
  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. Laroque, Guy & Salanié, Bernard, 2003. "Fertility and Financial Incentives in France," CEPR Discussion Papers 4064, C.E.P.R. Discussion Papers.
  9. 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.
  10. David Blau & Philip Robins, 1989. "Fertility, Employment, and Child-Care Costs," Demography, Springer, vol. 26(2), pages 287-299, May.
  11. 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).
  12. 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).
  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. 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.
  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.
  16. 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.
  17. Del Boca, Daniela, 2002. "The Effect of Child Care and Part Time Opportunities on Participation and Fertility Decisions in Italy," IZA Discussion Papers 427, Institute for the Study of Labor (IZA).
  18. Francesc Trillas, 2008. "Regulatory federalism in network industries," Working Papers 2008/8, Institut d'Economia de Barcelona (IEB).
Full references (including those not matched with items on IDEAS)

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. Albert Solé-Ollé & Pilar Sorribas-Navarro, 2009. "The dinamic adjustment of local government budgets: does Spain behave differently?," Working Papers 2009/7, Institut d'Economia de Barcelona (IEB).
  2. Pierre Mohnen & Boris Lokshin, 2009. "What does it take for and R&D tax incentive policy to be effective?," Working Papers 2009/9, Institut d'Economia de Barcelona (IEB).
  3. REINSTADLER Anne, 2011. "Luxembourg and France: Comparable Family Benefits, Comparable Fertility Levels?," CEPS/INSTEAD Working Paper Series 2011-65, CEPS/INSTEAD.
  4. 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.
  5. 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.
  6. repec:hal:cesptp:halshs-00660630 is not listed on IDEAS
  7. repec:hal:wpaper:hal-00657603 is not listed on IDEAS
  8. 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.
  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. repec:hal:cesptp:hal-00657603 is not listed on IDEAS
  12. 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.
  13. repec:hal:wpaper:halshs-00660630 is not listed on IDEAS
  14. 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.
  15. 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).

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  1. Economic Logic blog

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