Based on information from the 1991/92 General Household Survey, we examine the effect of work and non-work related child care costs on UK mother's employment rates. We find that subsidising work-related child care costs increases mothers' probability of labour force participation. However, we find also that subsidising non-work related child care costs, which are incurred by mothers irrespective of their working status, creates a significant disincentive effect for mothers to seek employment. This disincentive effect, which has been generally ignored in previous theoretical and empirical studies, puts in doubt the effectiveness of universal child care subsidies in increasing mothers' labour force participation rates.
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Paper provided by Department of Economics, University of Kent in its series Studies in Economics with number
9614.
Length: Date of creation: Oct 1996 Date of revision: Handle: RePEc:ukc:ukcedp:9614
Contact details of provider: Postal: Department of Economics, University of Kent at Canterbury, Canterbury, Kent, CT2 7NP Phone: +44 (0)1227 764000 Fax: +44 (0)1227 827850 Web page: http://www.ukc.ac.uk/economics/
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Find related papers by JEL classification: 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 H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs