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Nonmarket Household Time and the Cost of Children

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  • Christos Koulovatianos
  • Carsten Schröder
  • Ulrich Schmidt

Abstract

Raising children demands a considerable amount of parental time, obliging working parents either to further reduce their leisure or to buy child-care services in the market. Parents may face additional opportunity costs upon deciding to participate in the labor market, but these are difficult to measure. Using a survey instrument in Belgium and Germany, we estimate the income compensation needed to maintain family well-being when adults work vs. when they do not enter the labor market. In both countries we find that full-time working parents face extra child costs and require higher labor-market-participation compensation compared to childless adults.

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Paper provided by University of Nottingham, Centre for Finance, Credit and Macroeconomics (CFCM) in its series Discussion Papers with number 08/07.

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Handle: RePEc:not:notcfc:08/07

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Keywords: equivalent income; household well-being; reservation wage; child costs; parental unemployment trap; survey method.;

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Cited by:
  1. Christos Koulovatianos & Ulrich Schmidt & Carsten Schröder, 2008. "Arbeitslosengeld II: Arbeitsanreize und Verteilungsgerechtigkeit," Wirtschaftsdienst, Springer, Springer, vol. 88(7), pages 461-466, July.
  2. Timm Bönke & Carsten Schröder, 2011. "Poverty in Germany – Statistical Inference and Decomposition," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), Justus-Liebig University Giessen, Department of Statistics and Economics, Justus-Liebig University Giessen, Department of Statistics and Economics, vol. 231(2), pages 178-209, April.
  3. Bönke, Timm & Eichfelder, Sebastian & Utz, Stephen, 2012. "Uneven treatment of family life? Horizontal equity in the U.S. tax and transfer system," Discussion Papers, Free University Berlin, School of Business & Economics 2012/18, Free University Berlin, School of Business & Economics.
  4. Christos Koulovatianos & Carsten Schröder & Ulrich Schmidt, 2014. "Confronting the Representative Consumer with Household-Size Heterogeneity," CREA Discussion Paper Series, Center for Research in Economic Analysis, University of Luxembourg 14-13, Center for Research in Economic Analysis, University of Luxembourg.
  5. Schröder, Carsten & Bönke, Timm, 2012. "Country inequality rankings and conversion schemes," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy, Kiel Institute for the World Economy, vol. 6(28), pages 1-43.

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