IDEAS home Printed from https://ideas.repec.org/a/kap/reveho/v13y2015i4p815-836.html
   My bibliography  Save this article

Enticing even higher female labor supply: the impact of cheaper day care

Author

Listed:
  • Inés Hardoy
  • Pål Schøne

Abstract

We ask whether cheaper child care can spur labor supply of mothers in an economy with high female labor supply. We exploit exogenous variation in child care prices induced by a public reform. A triple difference approach is put forward. The results show that reduced child care prices led to a rise in labor supply of mothers by approximately 5 %. A “back-of-the-envelope” calculation estimates an elasticity of approximately −0.25, which is at the lower end compared to other studies, suggesting that labor supply is less elastic when female employment is high. Since a capacity-increase was introduced at the same time, the positive labor supply effect may be a result of both reduced prices and increased capacity. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Inés Hardoy & Pål Schøne, 2015. "Enticing even higher female labor supply: the impact of cheaper day care," Review of Economics of the Household, Springer, vol. 13(4), pages 815-836, December.
    • Handle: RePEc:kap:reveho:v:13:y:2015:i:4:p:815-836
    DOI: 10.1007/s11150-013-9215-8
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1007/s11150-013-9215-8
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1007/s11150-013-9215-8?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Sara Cools & Jon H. Fiva & Lars J. Kirkebøen, 2015. "Causal Effects of Paternity Leave on Children and Parents," Scandinavian Journal of Economics, Wiley Blackwell, vol. 117(3), pages 801-828, July.
    2. Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2008. "How far can reduced childcare prices push female labour supply?," Labour Economics, Elsevier, vol. 15(4), pages 647-659, August.
    3. Sandra E. Black & Paul J. Devereux & Katrine V. L�ken & Kjell G. Salvanes, 2014. "Care or Cash? The Effect of Child Care Subsidies on Student Performance," The Review of Economics and Statistics, MIT Press, vol. 96(5), pages 824-837, December.
    4. Michael Baker & Jonathan Gruber & Kevin Milligan, 2008. "Universal Child Care, Maternal Labor Supply, and Family Well-Being," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 709-745, August.
    5. 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.
    6. David Blau, 2003. "Child Care Subsidy Programs," NBER Chapters, in: Means-Tested Transfer Programs in the United States, pages 443-516, National Bureau of Economic Research, Inc.
    7. Rachel Connelly & Jean Kimmel, 2003. "Marital status and full-time/part-time work status in child care choices," Applied Economics, Taylor & Francis Journals, vol. 35(7), pages 761-777.
    8. David Blau & Erdal Tekin, 2007. "The determinants and consequences of child care subsidies for single mothers in the USA," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 719-741, October.
    9. 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 374-381, August.
    10. Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2007. "Do reduced child care prices make parents work more?," Working Paper Series 2007:2, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    11. 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.
    12. Maria Donovan Fitzpatrick, 2010. "Preschoolers Enrolled and Mothers at Work? The Effects of Universal Prekindergarten," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 51-85, January.
    13. Chris Herbst, 2010. "The labor supply effects of child care costs and wages in the presence of subsidies and the earned income tax credit," Review of Economics of the Household, Springer, vol. 8(2), pages 199-230, June.
    14. Joshua D. Angrist & Jörn-Steffen Pischke, 2009. "Mostly Harmless Econometrics: An Empiricist's Companion," Economics Books, Princeton University Press, edition 1, number 8769.
    15. 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.
    16. 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.
    17. Pierre Lefebvre & Philip Merrigan, 2008. "Child-Care Policy and the Labor Supply of Mothers with Young Children: A Natural Experiment from Canada," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 519-548, July.
    18. Datta Gupta, Nabanita & Smith, Nina & Verner, Mette, 2006. "Child Care and Parental Leave in the Nordic Countries: A Model to Aspire to?," IZA Discussion Papers 2014, Institute of Labor Economics (IZA).
    19. Elizabeth U. Cascio, 2009. "Maternal Labor Supply and the Introduction of Kindergartens into American Public Schools," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Finlay, Jocelyn E., 2021. "Women’s reproductive health and economic activity: A narrative review," World Development, Elsevier, vol. 139(C).
    2. Reo Takaku, 2019. "The wall for mothers with first graders: availability of afterschool childcare and continuity of maternal labor supply in Japan," Review of Economics of the Household, Springer, vol. 17(1), pages 177-199, March.
    3. Christoph Zangger & Janine Widmer & Sandra Gilgen, 2021. "Work, Childcare, or Both? Experimental Evidence on the Efficacy of Childcare Subsidies in Raising Parental Labor Supply," Journal of Family and Economic Issues, Springer, vol. 42(3), pages 449-472, September.
    4. Selina Gangl & Martin Huber, 2021. "From homemakers to breadwinners? How mandatory kindergarten affects maternal labour market outcomes," Papers 2111.14524, arXiv.org, revised Mar 2022.
    5. Anna Lovász & Ágnes Szabó-Morvai, 2019. "Childcare availability and maternal labor supply in a setting of high potential impact," Empirical Economics, Springer, vol. 56(6), pages 2127-2165, June.
    6. Gangl, Selina & Huber, Martin, 2021. "From homemakers to breadwinners? How mandatory kindergarten affects maternal labour market attachment," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203636, Verein für Socialpolitik / German Economic Association, revised 2021.
    7. Jennifer Glass & Carolyn E. Waldrep, 2023. "Child Allowances and Work-Family Reconciliation Policies: What Best Reduces Child Poverty and Gender Inequality While Enabling Desired Fertility?," Population Research and Policy Review, Springer;Southern Demographic Association (SDA), vol. 42(5), pages 1-57, October.
    8. BOUSSELIN Audrey, 2019. "Expanding access to universal childcare: Effects on childcare arrangements and maternal employment," LISER Working Paper Series 2019-11, Luxembourg Institute of Socio-Economic Research (LISER).
    9. D. Vandelannoote & P. Vanleenhove & A. Decoster & J. Ghysels & G. Verbist, 2015. "Maternal employment: the impact of triple rationing in childcare," Review of Economics of the Household, Springer, vol. 13(3), pages 685-707, September.
    10. Taryn W. Morrissey, 2017. "Child care and parent labor force participation: a review of the research literature," Review of Economics of the Household, Springer, vol. 15(1), pages 1-24, March.
    11. Henning Finseraas & Inés Hardoy & Pål Schøne, 2017. "School enrolment and mothers’ labor supply: evidence from a regression discontinuity approach," Review of Economics of the Household, Springer, vol. 15(2), pages 621-638, June.
    12. Elizabeth E. Davis & Caroline Carlin & Caroline Krafft & Nicole D. Forry, 2018. "Do Child Care Subsidies Increase Employment Among Low-Income Parents?," Journal of Family and Economic Issues, Springer, vol. 39(4), pages 662-682, December.
    13. Daniela Del Boca, 2015. "The impact of child care costs and availability on mothers’ labor supply," ImPRovE Working Papers 15/04, Herman Deleeck Centre for Social Policy, University of Antwerp.
    14. Isabelle Bouchard & Lydia Cheung & Gail Pacheco, 2021. "Evaluating the impact of 20 hours free early childhood education on mothers’ labour force participation and earnings," New Zealand Economic Papers, Taylor & Francis Journals, vol. 55(2), pages 188-202, May.
    15. Marc Jourdain Muizon, 2020. "Subsidies for parental leave and formal childcare: be careful what you wish for," Review of Economics of the Household, Springer, vol. 18(3), pages 735-772, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Müller, Kai-Uwe & Wrohlich, Katharina, 2020. "Does subsidized care for toddlers increase maternal labor supply? Evidence from a large-scale expansion of early childcare," Labour Economics, Elsevier, vol. 62(C).
    2. Christoph Zangger & Janine Widmer & Sandra Gilgen, 2021. "Work, Childcare, or Both? Experimental Evidence on the Efficacy of Childcare Subsidies in Raising Parental Labor Supply," Journal of Family and Economic Issues, Springer, vol. 42(3), pages 449-472, September.
    3. Helmut Rainer & Stefan Bauernschuster & Wolfgang Auer & Natalia Danzer & Mine Hancioglu & Bastian Hartmann & Timo Hener & Christian Holzner & Notburga Ott & Janina Reinkowski & Martin Werding, 2013. "Kinderbetreuung," ifo Forschungsberichte, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, number 59.
    4. Helmut Rainer & Wolfgang Auer & Stefan Bauernschuster & Natalia Danzer & Anita Fichtl & Timo Hener & Christian Holzner & Janina Reinkowski & Martin Werding & Anita Dietrich, 2013. "Publicly-Subsidised Child Care in Germany: Evaluation of the Impact of the Labour Market Participation of Mothers," ifo Schnelldienst, ifo Institute - Leibniz Institute for Economic Research at the University of Munich, vol. 66(07), pages 31-40, April.
    5. Elizabeth E. Davis & Caroline Carlin & Caroline Krafft & Nicole D. Forry, 2018. "Do Child Care Subsidies Increase Employment Among Low-Income Parents?," Journal of Family and Economic Issues, Springer, vol. 39(4), pages 662-682, December.
    6. Anna Lovász & Ágnes Szabó-Morvai, 2019. "Childcare availability and maternal labor supply in a setting of high potential impact," Empirical Economics, Springer, vol. 56(6), pages 2127-2165, June.
    7. Christina Gathmann & Björn Sass, 2018. "Taxing Childcare: Effects on Childcare Choices, Family Labor Supply, and Children," Journal of Labor Economics, University of Chicago Press, vol. 36(3), pages 665-709.
    8. Anna Busse & Christina Gathmann, 2018. "Free Daycare and Its Effects on Children and Their Families," SOEPpapers on Multidisciplinary Panel Data Research 958, DIW Berlin, The German Socio-Economic Panel (SOEP).
    9. Herbst, Chris M., 2013. "Universal Child Care, Maternal Employment, and Children's Long-Run Outcomes: Evidence from the U.S. Lanham Act of 1940," IZA Discussion Papers 7846, Institute of Labor Economics (IZA).
    10. Nollenberger, Natalia & Rodríguez-Planas, Núria, 2011. "Child Care, Maternal Employment and Persistence: A Natural Experiment from Spain," IZA Discussion Papers 5888, Institute of Labor Economics (IZA).
    11. BOUSSELIN Audrey, 2019. "Expanding access to universal childcare: Effects on childcare arrangements and maternal employment," LISER Working Paper Series 2019-11, Luxembourg Institute of Socio-Economic Research (LISER).
    12. Anna Lovasz & Agnes Szabo-Morvai, 2013. "Does Childcare Matter for Maternal Labor Supply? Pushing the limits of the Regression Discontinuity Framework," Budapest Working Papers on the Labour Market 1313, Institute of Economics, Centre for Economic and Regional Studies.
    13. Bauernschuster, Stefan & Schlotter, Martin, 2015. "Public child care and mothers' labor supply—Evidence from two quasi-experiments," Journal of Public Economics, Elsevier, vol. 123(C), pages 1-16.
    14. Müller, Kai-Uwe & Wrohlich, Katharina & Sengül, Denise, 2016. "Does subsidized care for toddlers increase maternal labor supply? Evidence from a large-scale expansion of early childcare," VfS Annual Conference 2016 (Augsburg): Demographic Change 145654, Verein für Socialpolitik / German Economic Association.
    15. Felfe, Christina & Lechner, Michael & Thiemann, Petra, 2016. "After-school care and parents' labor supply," Labour Economics, Elsevier, vol. 42(C), pages 64-75.
    16. Shintaro Yamaguchi, 2016. "Family Policies and Female Employment in Japan," Department of Economics Working Papers 2016-06, McMaster University.
    17. Taryn W. Morrissey, 2017. "Child care and parent labor force participation: a review of the research literature," Review of Economics of the Household, Springer, vol. 15(1), pages 1-24, March.
    18. Bettendorf, Leon J.H. & Jongen, Egbert L.W. & Muller, Paul, 2015. "Childcare subsidies and labour supply — Evidence from a large Dutch reform," Labour Economics, Elsevier, vol. 36(C), pages 112-123.
    19. Huebener, Mathias & Pape, Astrid & Spiess, C. Katharina, 2020. "Parental labour supply responses to the abolition of day care fees," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 510-543.
    20. Shintaro Yamaguchi, 2017. "Family Policies and Female Employment in Japan," The Japanese Economic Review, Springer, vol. 68(3), pages 305-322, September.

    More about this item

    Keywords

    Labor supply; Family policy; Child care costs; Difference-in-differences-in-differences; J13; J18; J22;
    All these keywords.

    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

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:kap:reveho:v:13:y:2015:i:4:p:815-836. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Sonal Shukla or Springer Nature Abstracting and Indexing (email available below). General contact details of provider: http://www.springer.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.