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Can Child Care Policy Encourage Employment and Fertility? Evidence from a Structural Model

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  • Haan, Peter

    ()
    (DIW Berlin)

  • Wrohlich, Katharina

    ()
    (DIW Berlin)

Abstract

In this paper we develop a structural model of female employment and fertility which accounts for intertemporal feedback effects between the two outcomes. We identify the effect of financial incentives on the employment and fertility decision by exploiting variation in the tax and transfer system which differs by employment state and number of children. To this end we simulate in detail the effects of the tax and transfer system including child care costs. The model provides estimates of structural preferences of women which can be used to study the effect of various policy reforms. In particular, we show that increasing child care subsidies conditional on employment increases labor supply of all women as well as fertility of the childless and highly educated women.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 4503.

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Length: 33 pages
Date of creation: Oct 2009
Date of revision:
Publication status: published in: Labour Economics, 2011, 18 (4), 498-512
Handle: RePEc:iza:izadps:dp4503

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Keywords: fertility; financial incentives; employment;

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References

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Citations

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Cited by:
  1. Mizuochi, Masaaki, 2012. "The Effect of Work-family Balance Policy on Childbirth and Women's Work," Discussion Paper Series 575, Institute of Economic Research, Hitotsubashi University.
  2. Anna Lovasz & Agnes Szabo-Morvai, 2013. "Does Childcare Matter for Maternal Labor Supply? Pushing the limits of the Regression Discontinuity Framework," Budapest Working Papers on the Labour Market 1313, Institute of Economics, Centre for Economic and Regional Studies, Hungarian Academy of Sciences.
  3. Pia S. Schober & C. Katharina Spieß, 2014. "Local Day-Care Quality and Maternal Employment: Evidence from East and West Germany," SOEPpapers on Multidisciplinary Panel Data Research 649, DIW Berlin, The German Socio-Economic Panel (SOEP).
  4. Kurowska, Anna & Myck, Michal & Wrohlich, Katharina, 2012. "Family and Labor Market Choices: Requirements to Guide Effective Evidence-Based Policy," IZA Discussion Papers 6846, Institute for the Study of Labor (IZA).
  5. Pia S. Schober & Christian Schmitt, 2013. "Day-Care Expansion and Parental Subjective Well-Being: Evidence from Germany," SOEPpapers on Multidisciplinary Panel Data Research 602, DIW Berlin, The German Socio-Economic Panel (SOEP).
  6. Rainald Borck, 2011. "Adieu Rabenmutter - The Effect of Culture on Fertility, Female Labour Supply, the Gender Wage Gap and Childcare," CESifo Working Paper Series 3337, CESifo Group Munich.
  7. Verena Tobsch, 2013. "Betreuung von Schulkindern: ein weiterer Schlüssel zur Aktivierung ungenutzter Arbeitskräftepotenziale?," SOEPpapers on Multidisciplinary Panel Data Research 573, DIW Berlin, The German Socio-Economic Panel (SOEP).
  8. Bick, Alexander, 2010. "The quantitative role of child care for female labor force participation and fertility," MPRA Paper 25474, University Library of Munich, Germany.
  9. repec:ese:emodwp:em19-13 is not listed on IDEAS
  10. repec:diw:diwwpp:dp1315 is not listed on IDEAS
  11. Johannes Geyer & Peter Haan & Katharina Wrohlich, 2014. "The Effects of Family Policy on Mothers' Labor Supply: Combining Evidence from a Structural Model and a Natural Experiment," Discussion Papers of DIW Berlin 1366, DIW Berlin, German Institute for Economic Research.
  12. Michal Myck & Anna Kurowska & Michal Kundera, 2013. "Financial support for families with children and its trade-offs: balancing redistribution and parental work incentives," Baltic Journal of Economics, Baltic International Centre for Economic Policy Studies, vol. 13(2), pages 59-83, December.
  13. C. Katharina Spieß, 2011. "Vereinbarkeit von Familie und Beruf – wie wirksam sind deutsche „Care Policies“?," Perspektiven der Wirtschaftspolitik, Verein für Socialpolitik, vol. 12(s1), pages 4-27, 05.
  14. Helmut Mahringer & Christine Zulehner, 2012. "Child-Care Costs and Mothers' Employment Rates. An Empirical Analysis for Austria," WIFO Working Papers 429, WIFO.
  15. REINSTADLER Anne, 2011. "Luxembourg and France: Comparable Family Benefits, Comparable Fertility Levels?," CEPS/INSTEAD Working Paper Series 2011-65, CEPS/INSTEAD.
  16. Johannes Geyer & Peter Haan & Katharina Wrohlich, 2014. "The Effects of Family Policy on Mothers' Labor Supply: Combining Evidence from a Structural Model and a Natural Experiment," SOEPpapers on Multidisciplinary Panel Data Research 645, DIW Berlin, The German Socio-Economic Panel (SOEP).
  17. Alexander Bick, 2010. "The Quantitative Role of Child Care for Fertility and Female Labor Force Participation," 2010 Meeting Papers 892, Society for Economic Dynamics.

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