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Child Care Costs and the Employment Status of Married Australian Mothers

  • Anu Rammohan
  • Stephen Whelan

Using data from the HILDA (Household Income and Labour Dynamics), this paper examines the implications of child care costs on maternal employment status by distinguishing between full-time and part-time work. Our empirical approach uses an ordered probit model taking into account the endogeneity associated with both wages and child care costs. Results indicate that child care costs have a statistically insignificant effect on the decision to work either full time or part time. Moreover, the reported elasticities of part-time and full-time work with respect to child care costs are relatively low. This suggests that the significant subsidies paid to users of child care may have a limited role in increasing the labour market activity of married mothers.

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File URL: https://www.cbe.anu.edu.au/researchpapers/cepr/DP517.pdf
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Paper provided by Centre for Economic Policy Research, Research School of Economics, Australian National University in its series CEPR Discussion Papers with number 517.

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Length: 27 pages
Date of creation: Apr 2006
Date of revision:
Handle: RePEc:auu:dpaper:517
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  1. Lundhlom, M. & Ohlsson, H., 1998. "Who Takes Care of the Children? The Quantity-Quality Model Revisited," Papers 1998:23, Uppsala - Working Paper Series.
  2. Philip K. Robins & Charles Michalopoulos, 2002. "Employment and child-care choices of single-parent families in Canada and the United States," Journal of Population Economics, Springer, vol. 15(3), pages 465-493.
  3. Elisa-Rose Birch, 2005. "Studies of the Labour Supply of Australian Women: What Have We Learned?," The Economic Record, The Economic Society of Australia, vol. 81(252), pages 65-84, 03.
  4. Rammohan, Anu, 2004. "Child care and female employment decisions: A theoretical note," Working Papers 3, University of Sydney, School of Economics.
  5. 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.
  6. Susan Ettner, 1995. "The impact of “parent care” on female labor supply decisions," Demography, Springer, vol. 32(1), pages 63-80, February.
  7. Deborah Schofield & Josh Polette, 1998. "Measuring the Impact of Child Care Subsidies on the Incomes of Mothers Returning to Work," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 31(1), pages 47-62.
  8. Stephen Whelan & Anu Rammohan, 2005. "Child Care and Female Decisions," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 8(2), pages 203-225, June.
  9. Ribar, David C, 1995. "A Structural Model of Child Care and the Labor Supply of Married Women," Journal of Labor Economics, University of Chicago Press, vol. 13(3), pages 558-97, July.
  10. Robert Drago & Rosanna Scutella & Amy Varner, 2002. "Work and Family Directions in the US and Australia: A Policy Research Agenda," Melbourne Institute Working Paper Series wp2002n12, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
  11. Florence Jaumotte, 2003. "Female Labour Force Participation: Past Trends and Main Determinants in OECD Countries," OECD Economics Department Working Papers 376, OECD Publishing.
  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. Charles Michalopoulos & Philip K. Robins, 2000. "Employment and child-care choices in Canada and the United States," Canadian Journal of Economics, Canadian Economics Association, vol. 33(2), pages 435-470, May.
  14. 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.
  15. Blank, Rebecca M, 1989. "The Role of Part-Time Work in Women's Labor Market Choices over Time," American Economic Review, American Economic Association, vol. 79(2), pages 295-99, May.
  16. Lisa Powell, 1998. "Part-time versus full-time work and child care costs: evidence for married mothers," Applied Economics, Taylor & Francis Journals, vol. 30(4), pages 503-511.
  17. 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 374-81, August.
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