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Child Care Costs and Mothers' Labor Supply: An Empirical Analysis for Germany

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  • Katharina Wrohlich

Abstract

This study analyzes the effect of child care costs on the labor supply of mothers with preschool children in Germany using data from the German Socio-Economic Panel (2002). Child care costs are estimated on the basis of a sample selection model. A structural household utility model, which is embedded in a detailed tax-benefit model, is used for labor supply estimation. In contrast to a previous German study, I find significant effects of child care costs on mother's labor supply. Compared to other countries such as the US, Canada or the UK, the effects are rather small, which can be explained by the fact that child care costs are already heavily subsidized in Germany.

Suggested Citation

  • Katharina Wrohlich, 2004. "Child Care Costs and Mothers' Labor Supply: An Empirical Analysis for Germany," Discussion Papers of DIW Berlin 412, DIW Berlin, German Institute for Economic Research.
  • Handle: RePEc:diw:diwwpp:dp412
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    References listed on IDEAS

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    1. Patricia M. Anderson & Philip B. Levine, 1999. "Child Care and Mothers' Employment Decisions," NBER Working Papers 7058, National Bureau of Economic Research, Inc.
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    6. 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.
    7. Lisa M. Powell, 1997. "The Impact of Child Care Cost on the Labour Supply of Married Mothers: Evidence from Canada," Canadian Journal of Economics, Canadian Economics Association, vol. 30(3), pages 577-594, August.
    8. Viktor Steiner & Katharina Wrohlich, 2004. "Work Incentives and Labor Supply Effects of the 'Mini-Jobs Reform' in Germany," Discussion Papers of DIW Berlin 438, DIW Berlin, German Institute for Economic Research.
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    13. Wenjui Han & Jane Waldfogel, 2001. "Child Care Costs and Women's Employment: A Comparison of Single and Married Mothers With Pre-School-Aged Children," Social Science Quarterly, Southwestern Social Science Association, vol. 82(3), pages 552-568.
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    Cited by:

    1. World Bank, 2007. "Chile - County Gender Assessment : Expanding Women's Work Choices to Enhance Chile's Economic Potential," World Bank Other Operational Studies 7639, The World Bank.
    2. Helmut Mahringer & Christine Zulehner, 2015. "Child-care costs and mothers’ employment rates: an empirical analysis for Austria," Review of Economics of the Household, Springer, vol. 13(4), pages 837-870, December.
    3. Julia Bock-Schappelwein & Rainer Eppel & Ulrike Mühlberger, 2009. "Social Policy as a Productive Force," WIFO Monatsberichte (monthly reports), WIFO, vol. 82(11), pages 845-857, November.
    4. A. Zaiceva, 2007. "East-West migration and gender: Is there a "double disadvantage" vis-à-vis stayers?," Working Papers 608, Dipartimento Scienze Economiche, Universita' di Bologna.
    5. Daniela Del Boca & Daniela Vuri, 2007. "The mismatch between employment and child care in Italy: the impact of rationing," Journal of Population Economics, Springer;European Society for Population Economics, vol. 20(4), pages 805-832, October.
    6. Katharina Wrohlich, 2008. "The excess demand for subsidized child care in Germany," Applied Economics, Taylor & Francis Journals, vol. 40(10), pages 1217-1228.
    7. Olivier Bargain & Kristian Orsini & Andreas Peichl, 2012. "Comparing Labor Supply Elasticities in Europe and the US: New Results," SOEPpapers on Multidisciplinary Panel Data Research 525, DIW Berlin, The German Socio-Economic Panel (SOEP).
    8. Fitzenberger, Bernd & Sommerfeld, Katrin & Steffes, Susanne, 2013. "Causal effects on employment after first birth — A dynamic treatment approach," Labour Economics, Elsevier, vol. 25(C), pages 49-62.
    9. Daniela Del Boca, 2015. "The impact of child care costs and availability on mothers’ labor supply," ImPRovE Working Papers 15/04, Herman Deleeck Centre for Social Policy, University of Antwerp.
    10. Daniela Del Boca & Daniela Vuri, 2005. "Labor Supply and Child Care Costs: The Effect of Rationing," Labor and Demography 0510016, University Library of Munich, Germany.
    11. Colm Harmon & Claire Finn & Arnaud Chevalier & Tarja Viitanen, 2006. "The economics of early childhood care and education : technical research paper for the National Economic and Social Forum," Open Access publications 10197/671, School of Economics, University College Dublin.
    12. Eva Garcia-Moran & Zoe Kuehn, 2017. "With Strings Attached: Grandparent-Provided Child Care and Female Labor Market Outcomes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 23, pages 80-98, January.
    13. repec:eee:chieco:v:44:y:2017:i:c:p:227-240 is not listed on IDEAS
    14. Beate Henschel, 2008. "Why is the share of women willing to work in East Germany larger than in West Germany? A logit model of extensive labour supply decision," ifo Working Paper Series 56, ifo Institute - Leibniz Institute for Economic Research at the University of Munich.
    15. Viktor Steiner & Katharina Wrohlich, 2006. "Die Wirkung ausgewählter familienpolitischer Instrumente auf das Arbeitsangebot von Eltern: Expertise für den Familienbericht der Bundesregierung," DIW Berlin: Politikberatung kompakt, DIW Berlin, German Institute for Economic Research, volume 16, number pbk16.
    16. Zaiceva, Anzelika, 2010. "East-West migration and gender: Is there a differential effect for migrant women?," Labour Economics, Elsevier, vol. 17(2), pages 443-454, April.
    17. D. Vandelannoote & P. Vanleenhove & A. Decoster & J. Ghysels & G. Verbist, 2015. "Maternal employment: the impact of triple rationing in childcare," Review of Economics of the Household, Springer, vol. 13(3), pages 685-707, September.
    18. Eva Garcia-Moran & Zoe Kuehn, 2017. "With Strings Attached: Grandparent-Provided Child Care and Female Labor Market Outcomes," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 23, pages 80-98, January.
    19. Viktor Steiner & Katharina Wrohlich, 2005. "Work Incentives and Labor Supply Effects of the ‘Mini-Jobs Reform’ in Germany," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 91-116, March.
    20. Gema Zamarro, 2011. "Family Labor Participation and Child Care Decisions The Role of Grannies," Working Papers WR-833, RAND Corporation.
    21. Y.E. Akgündüz & J. Plantenga, 2015. "Childcare Prices and Maternal Employment: a Meta-Analysis," Working Papers 15-14, Utrecht School of Economics.

    More about this item

    Keywords

    Child care costs; Labor supply estimation;

    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

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