Estimating Net Child Care Price Elasticities of Partnered Women With Pre-School Children Using a Discrete Structural Labour Supply-Child Care Model
The purpose of this paper is to improve our understanding of the relationship between child care price and women's labour supply. We specify and estimate a discrete, structural model of the joint household decision over women's labour supply and child care demand. Parents care about the well-being and development of their children and we capture this by including child care directly in household utility. Our model improves on previous papers in that we allow formal child care to be used for reasons other than freeing up time for mothers to work (such as child development) and we allow mothers’ work hours to exceed formal child care hours. As informal and paternal care are important features of the data, this second relaxation of previous hour constraints is particularly important. We estimate the model using data from 2005 to 2007 from the Household Income and Labour Dynamics in Australia (HILDA) Survey. We find that on average a one percent increase in the net price of child care leads to a decrease in hours of labour provided by partnered women of 0.10 per cent and a decrease in the employment rate of 0.06 per cent. These estimates are statistically significant. Furthermore, we find that labour supply responses are larger for women with lower wages, less education, and lower income.
|Date of creation:||Nov 2011|
|Date of revision:|
|Contact details of provider:|| Postal: +61 2 6125 3807|
Phone: +61 2 6125 3807
Fax: +61 2 6125 0744
Web page: http://rse.anu.edu.au/cepr.php
More information through EDIRC
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Gong, Xiaodong & van Soest, Arthur, 2000.
"Family Structure and Female Labour Supply in Mexico City,"
IZA Discussion Papers
214, Institute for the Study of Labor (IZA).
- Xiaodong Gong & Arthur van Soest, 2002. "Family Structure and Female Labor Supply in Mexico City," Journal of Human Resources, University of Wisconsin Press, vol. 37(1), pages 163-191.
- Gong, X. & van Soest, A.H.O., 1997. "Family Structure and Female Labour Supply in Mexico City," Discussion Paper 1997-114, Tilburg University, Center for Economic Research.
- 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.
- Gong, Xiaodong & Breunig, Robert & King, Anthony, 2010. "How Responsive is Female Labour Supply to Child Care Costs: New Australian Estimates," IZA Discussion Papers 5119, Institute for the Study of Labor (IZA).
- Tom Kornstad & Thor Thoresen, 2007.
"A discrete choice model for labor supply and childcare,"
Journal of Population Economics,
Springer;European Society for Population Economics, vol. 20(4), pages 781-803, October.
- Tom Kornstad & Thor O. Thoresen, 2002. "A Discrete Choice Model for Labor Supply and Child Care," Discussion Papers 315, Statistics Norway, Research Department.
- Sándor, Zsolt & Train, Kenneth, 2004.
"Quasi-random simulation of discrete choice models,"
Transportation Research Part B: Methodological,
Elsevier, vol. 38(4), pages 313-327, May.
- Bhat, Chandra R., 2001. "Quasi-random maximum simulated likelihood estimation of the mixed multinomial logit model," Transportation Research Part B: Methodological, Elsevier, vol. 35(7), pages 677-693, August.
- Charlene M. Kalenkoski & David C. Ribar & Leslie S. Stratton, 2005. "Parental Child Care in Single-Parent, Cohabiting, and Married-Couple Families: Time-Diary Evidence from the United Kingdom," American Economic Review, American Economic Association, vol. 95(2), pages 194-198, May.
- Ribar, D.C., 1990.
"Child Care And The Labor Supply Of Married Women: Reducted Form Evidence,"
9-90-9, Pennsylvania State - Department of Economics.
- 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.
- Andrew Leigh, 2007.
"Returns to Education in Australia,"
CEPR Discussion Papers
561, Centre for Economic Policy Research, Research School of Economics, Australian National University.
- Breunig, Robert & Cobb-Clark, Deborah A. & Gong, Xiaodong, 2005.
"Improving the Modeling of Couples' Labour Supply,"
IZA Discussion Papers
1773, Institute for the Study of Labor (IZA).
- Ribar, D.C., 1991.
"A Structural Model of Child Care and the Labor Supply of Married Women,"
1-91-1, Pennsylvania State - Department of Economics.
- 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.
- Ribar, D.C., 1993. "A Structural Model of Child Care and the Labor Supply of Married Women," Papers 5-93-1, Pennsylvania State - Department of Economics.
- Rammohan, Anu, 2004. "Child care and female employment decisions: A theoretical note," Working Papers 3, University of Sydney, School of Economics.
- 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.
- Alan Duncan & Gillian Paull & Jayne Taylor, 2001. "Mothers' employment and the use of childcare in the UK," IFS Working Papers W01/23, Institute for Fiscal Studies.
- Trevor Breusch & Edith Gray, 2004. "New Estimates of Mothers’ Forgone Earnings Using HILDA Data," Australian Journal of Labour Economics (AJLE), Bankwest Curtin Economics Centre (BCEC), Curtin Business School, vol. 7(2), pages 125-150, June.
- Denise Doiron & Guyonne Kalb, 2004.
"Demands for Childcare and Household Labour Supply in Australia,"
Melbourne Institute Working Paper Series
wp2004n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
- Denise Doiron & Guyonne Kalb, 2005. "Demands for Child Care and Household Labour Supply in Australia," The Economic Record, The Economic Society of Australia, vol. 81(254), pages 215-236, 09.
- Train,Kenneth E., 2009.
"Discrete Choice Methods with Simulation,"
Cambridge University Press, number 9780521766555, june. pag.
- Arthur van Soest, 1995. "Structural Models of Family Labor Supply: A Discrete Choice Approach," Journal of Human Resources, University of Wisconsin Press, vol. 30(1), pages 63-88.
- 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.
When requesting a correction, please mention this item's handle: RePEc:auu:dpaper:653. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ()
If references are entirely missing, you can add them using this form.