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Can Family-Support Policies Help Explain Differences in Working Hours Across Countries?

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  • Urban Sila

Abstract

It has been suggested in the literature that taxes and subsidies play an important role in explaining the differences in working hours across countries. In this paper I test whether public programmes for family support play a role in explaining this variation. I analyse two types of policies: childcare subsidies and family cash benefits. I distinguish between people with children and people without children. Childcare subsidies should increase working hours in the economy and these effects should differ between people with children and people without children. Public support to families is also expected to decrease the amount of time people spend in childcare at home. I test this using household data for a set of European countries and the US. Empirical analysis, however, does not support the family-policy explanation. The effects of the policies on working hours are weak and insignificant. In regressions with time spent caring for children as a dependent variable, the estimates of the effects contradict the predictions of the theory. Furthermore, I don't find evidence for the expected differences in effects between parents and nonparents. I conclude that family policies are not helpful in explaining the variation in working hours across countries.

Suggested Citation

  • Urban Sila, 2009. "Can Family-Support Policies Help Explain Differences in Working Hours Across Countries?," CEP Discussion Papers dp0955, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp0955
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    More about this item

    Keywords

    Working hours; household behavior; taxation; subsidies; fiscal policies; child care; time allocation; labor supply;
    All these keywords.

    JEL classification:

    • D1 - Microeconomics - - Household Behavior
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • I38 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - Government Programs; Provision and Effects of Welfare Programs
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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