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The Cost of Fair Pay: How Child Care Work Wages Affect Formal Child Care Hours, Informal Child Care Hours, and Employment Hours

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  • Verena Löffler

Abstract

The debate on the effects of child care policies on household and individual behavior is substantial but lacks a discussion of the unintended consequences of rising wages in the child care work sector. To address this gap in the debate, the relation between rising pay and formal child care hours, informal child care hours, and employment hours is analyzed empirically with a case study on child care in Germany between 2012 and 2019. Among other findings, the evidence demonstrates that the consumption of formal child care hours of middle- and high-income households in eastern Germany correlates negatively with child care work wages, indicating price elasticity.

Suggested Citation

  • Verena Löffler, 2024. "The Cost of Fair Pay: How Child Care Work Wages Affect Formal Child Care Hours, Informal Child Care Hours, and Employment Hours," SOEPpapers on Multidisciplinary Panel Data Research 1205, DIW Berlin, The German Socio-Economic Panel (SOEP).
    • Handle: RePEc:diw:diwsop:diw_sp1205
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    References listed on IDEAS

    as
    1. Anna Busse & Christina Gathmann, 2018. "Free Daycare and Its Effects on Children and Their Families," SOEPpapers on Multidisciplinary Panel Data Research 958, DIW Berlin, The German Socio-Economic Panel (SOEP).
    2. Busse, Anna & Gathmann, Christina, 2020. "Free daycare policies, family choices and child development," Journal of Economic Behavior & Organization, Elsevier, vol. 179(C), pages 240-260.
    3. William Baumol, 1996. "Children of performing arts, the economic dilemma: The climbing costs of health care and education," Journal of Cultural Economics, Springer;The Association for Cultural Economics International, vol. 20(3), pages 183-206, September.
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    More about this item

    Keywords

    care work wage; early childhood education and care; informal child care; employment hours;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J38 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Public Policy

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