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Child Care and Mothers' Employment Decisions

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Author Info
Patricia M. Anderson
Philip B. Levine
Abstract

Rising female labor force participation and recent changes to the welfare system have increased the importance of child care for all women and, particularly, the less-skilled. This paper focuses on the child care decisions of women who differ by their skill level and the role that costs play in their work decision. After reviewing government child-care programs targeted at less-skilled women, we present a descriptive analysis of current utilization and child care costs. We emphasize differences across skill groups, showing that the least-skilled women both use less costly paid care and are more likely to use unpaid care. We then survey the existing evidence regarding the responsiveness of female labor supply to child care costs, reviewing both econometric studies and demonstration projects that include child care components. To investigate variation in the response to child care cost across skill levels, we implement models similar to this past literature. We conclude that while the overall elasticity of labor force participation with respect to the market price of child care is between -0.05 and -0.35, this elasticity is larger for the least skilled women and declines with skill. Throughout the paper, we reflect upon the implications of our analysis for welfare reform.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 7058.

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Date of creation: Mar 1999
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Handle: RePEc:nbr:nberwo:7058

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J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth

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. Nada Eissa & Hilary Williamson Hoynes, 1998. "The Earned Income Tax Credit and the Labor Supply of Married Couples," NBER Working Papers 6856, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
    Other versions:
  2. Kimmel, Jean, 1995. "The Effectiveness of Child-Care Subsidies in Encouraging the Welfare-to-Work Transition of Low-Income Single Mothers," American Economic Review, American Economic Association, vol. 85(2), pages 271-75, May. [Downloadable!] (restricted)
  3. Berger, Mark C & Black, Dan A, 1992. "Child Care Subsidies, Quality of Care, and the Labor Supply of Low-Income, Single Mothers," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 635-42, November. [Downloadable!] (restricted)
  4. 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)
  5. 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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  6. 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)
  7. David M. Blau & Alison P. Hagy, 1998. "The Demand for Quality in Child Care," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 104-146, February. [Downloadable!] (restricted)
  8. William M. Gentry & Alison P. Hagy, 1996. "The Distributional Effects of the Tax Treatment of Child Care Expenses," NBER Chapters, in: Empirical Foundations of Household Taxation, pages 99-134 National Bureau of Economic Research, Inc. [Downloadable!]
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  9. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-99, July. [Downloadable!] (restricted)
    Other versions:
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(explanations, 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. Jonah B. Gelbach, 2002. "Public Schooling for Young Children and Maternal Labor Supply," American Economic Review, American Economic Association, vol. 92(1), pages 307-322, March. [Downloadable!]
  2. Marijke van Deelen & Ronald Schettkat, . "Household demand Patterns in West Germany: 1978-1993. Consumption Patterns and Demand for Services," DEMPATEM Working Papers wp5, AIAS, Amsterdam Institute for Advanced Labour Studies, revised Feb 2004. [Downloadable!]
  3. Claudia Olivetti, 2006. "Changes in Women's Hours of Market Work: The Role of Returns to Experience," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 9(4), pages 557-587, October. [Downloadable!] (restricted)
    Other versions:
  4. Guyonne Kalb & Thor O. Thoresen, 2007. "The Case for Labour Supply Incentives: A Comparison of Family Policies in Australia and Norway," Melbourne Institute Working Paper Series wp2007n27, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne. [Downloadable!]
  5. 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!]
  6. Elizabeth Cascio, 2006. "Public Preschool and Maternal Labor Supply: Evidence from the Introduction of Kindergartens into American Public Schools," NBER Working Papers 12179, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
  7. Felix Büchel & C. Katharina Spieß, 2002. "Kindertageseinrichtungen und Müttererwerbstätigkeit: neue Erkenntnisse zu einem bekannten Zusammenhang," Vierteljahrshefte zur Wirtschaftsforschung / Quarterly Journal of Economic Research, DIW Berlin, German Institute for Economic Research, vol. 71(1), pages 95-113.
  8. Heather Antecol & Kelly Bedard, 2002. "The Decision to Work by Married Immigrant Women: The Role of Extended Family Households," Claremont Colleges Working Papers 2002-34, Claremont Colleges. [Downloadable!]
  9. Rachel Connelly & Jean Kimmel, 2001. "The Effect of Child Care Costs on the Labor Force Participation and Welfare Recipiency of Single Mothers: Implications for Welfare Reform," Staff Working Papers 01-69, W.E. Upjohn Institute for Employment Research. [Downloadable!] (restricted)
  10. Richard W. Johnson & Melissa M. Favreault & Joshua H. Goldwyn, 2003. "Employment, Social Security, And Future Retirement Outcomes For Single Mothers `," Working Papers, Center for Retirement Research at Boston College 2003-14, Center for Retirement Research. [Downloadable!]
  11. Cristina Borra Marcos, 2006. "Female labour participation and child care choices in Spain," Economic Working Papers at Centro de Estudios Andaluces E2006/16, Centro de Estudios Andaluces. [Downloadable!]
  12. Rachel Connelly & Jean Kimmel, 1999. "Marital Status and Full-time/Part-time Work Status in Child Care Choices: Changing the Rules of the Game," JCPR Working Papers 97, Northwestern University/University of Chicago Joint Center for Poverty Research.
    Other versions:
  13. Michaela Kreyenfeld & Karsten Hank, 1999. "The Availability of Child Care and Mothers' Employment in West Germany," Discussion Papers of DIW Berlin 191, DIW Berlin, German Institute for Economic Research. [Downloadable!]
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