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Partnered women’s labour supply and child care costs in Australia: measurement error and the child care price

  • Xiaodong Gong
  • Robert Breuing
  • Anthony King

We show that measurement error in the constructed price of child care can explain why previous Australian studies have found partnered women’s labour supply to be unresponsive to child care prices. Through improved data and improved construction of the child care price variable, we find child care price elasticities that are statistically significant, negative and in line with elasticities found in other developed countries.

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File URL: https://www.cbe.anu.edu.au/researchpapers/cepr/DP652.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 652.

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Date of creation: Nov 2011
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Handle: RePEc:auu:dpaper:652
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  7. Xiaodong Gong & Robert Breunig & Anthony King, 2010. "How responsive is female labour supply to child care costs - new Australian estimates," Treasury Working Papers 2010-03, The Treasury, Australian Government, revised Apr 2010.
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  9. Mark Wooden & Simon Freidin & Nicole Watson, 2002. "The Household, Income and Labour Dynamics in Australia (HILDA)Survey: Wave 1," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 35(3), pages 339-348.
  10. Ribar, D.C., 1991. "A Structural Model of Child Care and the Labor Supply of Married Women," Papers 1-91-1, Pennsylvania State - Department of Economics.
  11. 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.
  12. Richard Blundell & Alan Duncan & Julian McCrae & Costas Meghir, 2000. "The labour market impact of the working families’ tax credit," Fiscal Studies, Institute for Fiscal Studies, vol. 21(1), pages 75-103, March.
  13. Katharina Wrohlich, 2011. "Labor Supply and Child Care Choices in a Rationed Child Care Market," Discussion Papers of DIW Berlin 1169, DIW Berlin, German Institute for Economic Research.
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  16. Robert Breunig & Andrew Weiss & Chikako Yamauchi & Xiaodong Gong & Joseph Mercante, 2011. "Child Care Availability, Quality and Affordability: Are Local Problems Related to Labour Supply?," The Economic Record, The Economic Society of Australia, vol. 87(276), pages 109-124, March.
  17. Charles Michalopoulos & Philip K. Robins & Irwin Garfinkel, 1992. "A Structural Model of Labor Supply and Child Care Demand," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 166-203.
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  19. Robert Breunig & Joseph Mercante, 2009. "The accuracy of predicted wages of the non-employed and implications for policy simulations from structural labour supply models," Treasury Working Papers 2009-03, The Treasury, Australian Government, revised Mar 2009.
  20. 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.
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  22. Rammohan, Anu, 2004. "Child care and female employment decisions: A theoretical note," Working Papers 3, University of Sydney, School of Economics.
  23. David M. Blau & Alison P. Hagy, 1998. "The Demand for Quality in Child Care," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 104-146, February.
  24. Anu Rammohan & Stephen Whelan, 2007. "The Impact Of Childcare Costs On The Full-Time/Part-Time Employment Decisions Of Australian Mothers," Australian Economic Papers, Wiley Blackwell, vol. 46(2), pages 152-169, 06.
  25. Naci Mocan, 2007. "Can consumers detect lemons? An empirical analysis of information asymmetry in the market for child care," Journal of Population Economics, Springer, vol. 20(4), pages 743-780, October.
  26. 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.
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