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Partnered women's labour supply and child care costs in Australia: Measurement error and the child care price

  • Xiaodong Gong

    ()

    (NATSEM, University of Canberra)

  • Robert Breunig
  • 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: http://www.natsem.canberra.edu.au/files/download?id=739
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Paper provided by University of Canberra, National Centre for Social and Economic Modelling in its series NATSEM Working Paper Series with number 11/13.

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Length: 34 pages
Date of creation: Sep 2011
Date of revision:
Publication status: Published as a NATSEM Working Paper series
Handle: RePEc:cba:wpaper:wp1113
Contact details of provider: Postal: University of Canberra, ACT 2601
Phone: +61 2 (02) 6201 2750
Fax: +61 2 (02) 6201 2751
Web page: http://www.natsem.canberra.edu.au/
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  1. 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.
  2. Wrohlich, Katharina, 2006. "Labor Supply and Child Care Choices in a Rationed Child Care Market," IZA Discussion Papers 2053, Institute for the Study of Labor (IZA).
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  5. Rammohan, Anu, 2004. "Child care and female employment decisions: A theoretical note," Working Papers 3, University of Sydney, School of Economics.
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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.
  8. 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.
  9. Tom Kornstad & Thor O. Thoresen, 2002. "A Discrete Choice Model for Labor Supply and Child Care," Discussion Papers 315, Research Department of Statistics Norway.
  10. 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.
  11. Robert Breunig & Joseph Mercante, 2010. "The Accuracy of Predicted Wages of the Non-Employed and Implications for Policy Simulations from Structural Labour Supply Models," The Economic Record, The Economic Society of Australia, vol. 86(272), pages 49-70, 03.
  12. Susan L. Averett & H. Elizabeth Peters & Donald M. Waldman, . "Tax Credits, Labor Supply, and Child Care," University of Chicago - Population Research Center 92-9a, Chicago - Population Research Center.
  13. Patricia M. Anderson & Philip B. Levine, 1999. "Child Care and Mothers' Employment Decisions," NBER Working Papers 7058, National Bureau of Economic Research, Inc.
  14. Robert Breunig & Deborah Cobb-Clark & Xiaodong Gong, 2005. "Improving the Modeling of Couples' Labour Supply," CEPR Discussion Papers 499, Centre for Economic Policy Research, Research School of Economics, Australian National University.
  15. 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.
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  18. David Blau & Janet Currie, 2004. "Preschool, Day Care, and Afterschool Care: Who's Minding the Kids?," NBER Working Papers 10670, National Bureau of Economic Research, Inc.
  19. Heckman, James J, 1974. "Shadow Prices, Market Wages, and Labor Supply," Econometrica, Econometric Society, vol. 42(4), pages 679-94, July.
  20. 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.
  21. 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.
  22. 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.
  23. 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.
  24. 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.
  25. 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.
  26. 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.
  27. 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.
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