The Cost of Caring for Young Children
AbstractThis study examines the "cost burden" of child care, defined as day care expenses divided by after-tax income. Data are from the wave 10 core and child care topical modules to the 1996 Survey of Income and Program Participation. We estimate that the average child under six years of age lives in a family that spends 4.9 percent of after-tax income on day care. However, this conceals wide variation: 63 percent of such children reside in families with no child care expenses and 10 percent are in families where the cost burden exceeds 16 percent. The burden is typically greater in single-parent than married-couple families but is not systematically related to a measure of socioeconomic status that we construct. One reason for this is that disadvantaged families use lower cost modes and pay less per hour for given types of care. The cost burden would be much less equal without low cost (presumably subsidized) formal care focused on needy families, as well as government tax and transfer policies that redistribute income towards them.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 11837.
Date of creation: Dec 2005
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Other versions of this item:
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-12-20 (All new papers)
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