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The Effect of Child Care Costs on the Employment and Welfare Recipiency of Single Mothers

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  • Rachel Connelly
  • Jean Kimmel

Abstract

This paper considers the effect of child care costs on two labor market outcomes for single mothers—whether to work for pay and whether to receive welfare. Hourly child care expenditures are estimated using data drawn from the 1992 and 1993 panels of the Survey of Income and Program Participation (SIPP). These expenditures are then used to predict the probability of welfare recipiency and employment. While the direction and significance of key variables are robust to changes in specification, the quantitative results are found to be sensitive to identification restrictions. All results show a substantial positive effect of child care costs on welfare recipiency, with the child care price elasticity of welfare recipiency varying from 1.0 to 1.9. Similarly, we find a significant negative effect of child care price on employment with elasticity estimates from ‐.3 to ‐1.1, showing that controlling for the welfare choice does not reduce the price elasticity of employment found in other studies.

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  • Rachel Connelly & Jean Kimmel, 2003. "The Effect of Child Care Costs on the Employment and Welfare Recipiency of Single Mothers," Southern Economic Journal, John Wiley & Sons, vol. 69(3), pages 498-519, January.
    • Handle: RePEc:wly:soecon:v:69:y:2003:i:3:p:498-519
    DOI: 10.1002/j.2325-8012.2003.tb00510.x
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    Cited by:

    1. Helmut Mahringer & Christine Zulehner, 2015. "Child-care costs and mothers’ employment rates: an empirical analysis for Austria," Review of Economics of the Household, Springer, vol. 13(4), pages 837-870, December.
    2. Chris Herbst & Burt Barnow, 2008. "Close to Home: A Simultaneous Equations Model of the Relationship Between Child Care Accessibility and Female Labor Force Participation," Journal of Family and Economic Issues, Springer, vol. 29(1), pages 128-151, March.
    3. 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.
    4. Jill E. Yavorsky & Leah Ruppanner, 2022. "An Argument For Universal Preschool And Childcare In The U.S," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 41(3), pages 922-929, June.
    5. Nina A. Stoddard-Bennett & Jordan Coburn & Mikaela J. Dufur & Jonathan A. Jarvis & Shana L. Pribesh, 2023. "Family Structure and Child Behavior Problems in Australia, the United Kingdom, and the United States," IJERPH, MDPI, vol. 20(3), pages 1-24, January.
    6. Andrén, Thomas, 2002. "A Structural Model of Childcare, Welfare, and the Labor Supply of Single Mothers," Working Papers in Economics 82, University of Gothenburg, Department of Economics.
    7. Andren, Thomas, 2003. "The choice of paid childcare, welfare, and labor supply of single mothers," Labour Economics, Elsevier, vol. 10(2), pages 133-147, April.

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    More about this item

    JEL classification:

    • I3 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty
    • J2 - Labor and Demographic Economics - - Demand and Supply of Labor
    • J6 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers

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