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Family policy and couples’ labour supply: an empirical assessment

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  • Ross Guest

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  • Nick Parr

Abstract

This paper empirically examines the effect on couples’ labour supply of a universal at-birth cash benefit and a government subsidy equal to 50% of child care expenditure for working parents. The method is first to simulate the effects on labour supply over the adult lifecycle using a calibrated dynamic utility maximisation model of a representative couple, using data drawn from waves of a longitudinal survey for Australia. Then using the same data, the effect of family benefits and the child care subsidy on couples’ hours worked is econometrically estimated. The 50% child care subsidy was found to increase the average couple’s labour supply by the equivalent of 0.75 to 1 h per week whilst children are of pre-school age, and less on average over the couple’s working lifetime. The cash benefit changes were found to have a negligible effect on labour supply. Copyright Springer-Verlag 2013

Suggested Citation

  • 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.
  • Handle: RePEc:spr:jopoec:v:26:y:2013:i:4:p:1631-1660
    DOI: 10.1007/s00148-012-0421-0
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    References listed on IDEAS

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    Cited by:

    1. repec:lrk:eeaart:35_3_13 is not listed on IDEAS
    2. Regina T. Riphahn & Frederik Wiynck, 2017. "Fertility effects of child benefits," Journal of Population Economics, Springer;European Society for Population Economics, vol. 30(4), pages 1135-1184, October.

    More about this item

    Keywords

    Labour supply; Child care; Family benefits; J13; J18; J22;

    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

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