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Daycare Subsidies and Labor Supply in Sweden

Author

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  • Gustafsson, Siv
  • Stafford, Frank

Abstract

The provision of subsidized child care may encourage women to participate in the paid labor force. This paper analyzes the effects of the price and availability of subsidized child care on labor force participation, using data from a Swedish household survey for 1984 in combination with data on public day care fees and spaces per child by community. We argue that the subsidy rate and availability of spaces determined by the political leaders of the community is to a large extent exogenous to the household. The joint out-of-home child care and labor supply decision is analyzed by logit-choice models. We find that the provision of high quality public day care in Sweden encourages the labor market activity of women with preschoolers, even when a spouse's income is high, and that when spaces are not rationed a lower price encourages use. This is consistent with the predictions of our theoretical model.

Suggested Citation

  • Gustafsson, Siv & Stafford, Frank, 1988. "Daycare Subsidies and Labor Supply in Sweden," CEPR Discussion Papers 279, C.E.P.R. Discussion Papers.
    • Handle: RePEc:cpr:ceprdp:279
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    Cited by:

    1. Francis Teal, 1992. "The Use and Cost of Child Care in Australia," Australian Economic Review, The University of Melbourne, Melbourne Institute of Applied Economic and Social Research, vol. 25(1), pages 3-14, January.
    2. Klevmarken, Anders, 1989. "Modelling Labor Supply in a Dynamic Economy," Working Paper Series 247, Research Institute of Industrial Economics.
    3. Rachel Connelly & Jean Kimmel, 2003. "The Effect of Child Care Costs on the Employment and Welfare Recipiency of Single Mothers," Southern Economic Journal, John Wiley & Sons, vol. 69(3), pages 498-519, January.
    4. Connelly, Rachel. & DeGraff, Deborah S. & Levison, Deborah., 1991. "Child care policy and women's market work in urban Brazil," ILO Working Papers 992858023402676, International Labour Organization.
    5. Edwin van Gameren & Ingrid Ooms, 2009. "Childcare and labor force participation in the Netherlands: the importance of attitudes and opinions," Review of Economics of the Household, Springer, vol. 7(4), pages 395-421, December.
    6. Dora L. Costa, 2000. "From Mill Town to Board Room: The Rise of Women's Paid Labor," Journal of Economic Perspectives, American Economic Association, vol. 14(4), pages 101-122, Fall.
    7. Henz, Ursula & Sundström, Marianne, 2001. "Partner Choice and Women's Paid Work in Sweden - The Role of Earnings," Working Paper Series 1/2000, Stockholm University, Swedish Institute for Social Research.
    8. Karen Mason & Karen Kuhlthau, 1992. "The perceived impact of child care costs on women’s labor supply and fertility," Demography, Springer;Population Association of America (PAA), vol. 29(4), pages 523-543, November.
    9. repec:ilo:ilowps:285802 is not listed on IDEAS

    More about this item

    Keywords

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    JEL classification:

    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • H53 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Welfare Programs
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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