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Cheaper child care, more children

  • Mörk, Eva

    ()

    (IFAU - Institute for Labour Market Policy Evaluation)

  • Sjögren, Anna

    ()

    (IFAU - Insitute for Labour Market Policy Evaluation)

  • Svalelryd, Helena

    (IFN)

We study the effect of child care costs on the fertility behavior of Swedish women and find that reductions in child care charges influence fertility decisions, even when costs are initially highly subsidized. Exploiting the exogenous variation in child care costs caused by a Swedish child care reform, we are able to identify the causal effect of child care costs on fertility in a context in which child care enrolment is almost universal and the labor force participation of mothers is very high. A typical household planning another child experienced a reduction in expected future child care costs of SEK 106,000 (USD 17,800). This reduction resulted in 3–5 more child births per 1,000 women during an 18 month period, which corresponds to a 4–6 per cent increase in the birth rate.

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File URL: http://www.ifau.se/upload/pdf/se/2008/wp08-29.pdf
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Paper provided by IFAU - Institute for Evaluation of Labour Market and Education Policy in its series Working Paper Series with number 2008:29.

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Length: 39 pages
Date of creation: 07 Dec 2008
Date of revision:
Publication status: Published as Mörk, Eva, Anna Sjögren and Helena Svalelryd, 'Childcare costs and the demand for children—evidence from a nationwide reform' in Journal of Population Economics, 2013, pages 33-65.
Handle: RePEc:hhs:ifauwp:2008_029
Contact details of provider: Postal: IFAU, P O Box 513, SE-751 20 Uppsala, Sweden
Phone: (+46) 18 - 471 70 70
Fax: (+46) 18 - 471 70 71
Web page: http://www.ifau.se/
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  1. Furtado, Delia & Hock, Heinrich, 2008. "Immigrant Labor, Child-Care Services, and the Work-Fertility Trade-Off in the United States," IZA Discussion Papers 3506, Institute for the Study of Labor (IZA).
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  14. Ermisch, John F, 1989. "Purchased Child Care, Optimal Family Size and Mother's Employment: Theory and Econometric Analysis," Journal of Population Economics, Springer, vol. 2(2), pages 79-102.
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  17. Patricia Cort�s & Jos� Tessada, 2011. "Low-Skilled Immigration and the Labor Supply of Highly Skilled Women," American Economic Journal: Applied Economics, American Economic Association, vol. 3(3), pages 88-123, July.
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