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Price of High-quality Daycare and Female Employment

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  • Marianne Simonsen

Abstract

Using local variation between municipalities, I analyze the degree to which the price of high-quality publicly subsidized childcare affects female employment following maternity leave. Importantly, prices are income dependent and thus likely endogenous, yet by exploiting information on minimum income compensation during non-employment, I bypass this problem. The results show that the price negatively affects employment. A price increase of €1 per month decreases employment by 0.08%, which corresponds to a price elasticity of -0.17. These effects prevail during the first 12 months after childbirth. I also find that availability of childcare increases employment. Copyright © The editors of the "Scandinavian Journal of Economics" 2010 .

Suggested Citation

  • Marianne Simonsen, 2010. "Price of High-quality Daycare and Female Employment," Scandinavian Journal of Economics, Wiley Blackwell, vol. 112(3), pages 570-594, September.
  • Handle: RePEc:bla:scandj:v:112:y:2010:i:3:p:570-594
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    References listed on IDEAS

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    1. Tekin, Erdal, 2005. "Child care subsidy receipt, employment, and child care choices of single mothers," Economics Letters, Elsevier, vol. 89(1), pages 1-6, October.
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    4. 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.
    5. Marianne Simonsen, 2005. "Availability and Price of High Quality Day Care and Female Employment," Economics Working Papers 2005-08, Department of Economics and Business Economics, Aarhus University.
    6. James J. Heckman, 1974. "Effects of Child-Care Programs on Women's Work Effort," NBER Chapters,in: Marriage, Family, Human Capital, and Fertility, pages 136-169 National Bureau of Economic Research, Inc.
    7. Christopher J. Ruhm, 1998. "The Economic Consequences of Parental Leave Mandates: Lessons from Europe," The Quarterly Journal of Economics, Oxford University Press, vol. 113(1), pages 285-317.
    8. Lisa M. Powell, 2002. "Joint Labor Supply and Childcare Choice Decisions of Married Mothers," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 106-128.
    9. Christopher J. Ruhm, 2004. "Parental Employment and Child Cognitive Development," Journal of Human Resources, University of Wisconsin Press, vol. 39(1).
    10. David C. Ribar, 1992. "Child Care and the Labor Supply of Married Women: Reduced Form Evidence," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 134-165.
    11. 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 635-642, November.
    12. 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.
    13. Siv Gustafsson & Frank Stafford, 1992. "Child Care Subsidies and Labor Supply in Sweden," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 204-230.
    14. Jean Kimmel, 1998. "Child Care Costs As A Barrier To Employment For Single And Married Mothers," The Review of Economics and Statistics, MIT Press, vol. 80(2), pages 287-299, May.
    15. Laura Larsson, 2003. "Evaluation of Swedish Youth Labor Market Programs," Journal of Human Resources, University of Wisconsin Press, vol. 38(4).
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    Cited by:

    1. Sirpa Weckström, 2015. "Finnish Mothers’ Assessments of the Harmfulness of Childcare at Home on Occupational Careers: A Comparison of Twelve European Countries," Social Sciences, MDPI, Open Access Journal, vol. 4(4), pages 1-22, November.
    2. Geyer, Johannes & Haan, Peter & Wrohlich, Katharina, 2015. "The effects of family policy on maternal labor supply: Combining evidence from a structural model and a quasi-experimental approach," Labour Economics, Elsevier, vol. 36(C), pages 84-98.
    3. Nina Drange & Kjetil Telle, 2017. "Preschool and school performance of children from immigrant families," Empirical Economics, Springer, vol. 52(2), pages 825-867, March.
    4. Havnes, Tarjei & Mogstad, Magne, 2011. "Money for nothing? Universal child care and maternal employment," Journal of Public Economics, Elsevier, vol. 95(11), pages 1455-1465.
    5. Halldén, Karin & Stenberg, Anders, 2013. "The Relationship between Hours of Domestic Services and Female Earnings: Panel Register Data Evidence from a Reform," Working Paper Series 4/2013, Stockholm University, Swedish Institute for Social Research.
    6. Datta Gupta, Nabanita & Simonsen, Marianne, 2011. "Where to Put the Kids? Effects of Type of Non-parental Child Care on Pre-teen Skills and Risky Behavior," IZA Discussion Papers 5848, Institute for the Study of Labor (IZA).
    7. repec:aea:aecrev:v:107:y:2017:i:6:p:1611-37 is not listed on IDEAS
    8. Simonsen, Marianne & Skipper, Lars, 2012. "The family gap in wages: What wombmates reveal," Labour Economics, Elsevier, vol. 19(1), pages 102-112.
    9. Nabanita Datta Gupta & Marianne Simonsen, 2010. "Effects of Universal Child Care Participation on Pre-teen Skills and Risky Behaviors," Economics Working Papers 2010-07, Department of Economics and Business Economics, Aarhus University.
    10. Ludovica Gambaro & Jan Marcus & Frauke H. Peter, 2016. "School Entry, Afternoon Care and Mothers' Labour Supply," Discussion Papers of DIW Berlin 1622, DIW Berlin, German Institute for Economic Research.
    11. Datta Gupta, Nabanita & Simonsen, Marianne, 2016. "Academic performance and type of early childhood care," Economics of Education Review, Elsevier, vol. 53(C), pages 217-229.
    12. Ann-Sofie Kolm & Edward P. Lazear, 2010. "Policies Affecting Work Patterns and Labor Income for Women," NBER Chapters,in: Reforming the Welfare State: Recovery and Beyond in Sweden, pages 57-81 National Bureau of Economic Research, Inc.
    13. Gosta Esping-Andersen, 2008. "Childhood investments and skill formation," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 15(1), pages 19-44, February.
    14. Ross Guest & Nick Parr, 2013. "Family policy and couples’ labour supply: an empirical assessment," Journal of Population Economics, Springer;European Society for Population Economics, vol. 26(4), pages 1631-1660, October.

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