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Taxing Childcare: Effects on Childcare Choices, Family Labor Supply and Children

Listed author(s):
  • Gathmann, Christina

    ()

    (Heidelberg University)

  • Sass, Björn

    ()

    (University of Mannheim)

Previous studies report a range of estimates for the response of female labor supply and childcare attendance to childcare prices. We shed new light on these questions using a policy reform that raises the price of public daycare. After the reform, children are 8 percentage points less likely to attend public daycare which implies a compensated price elasticity of -0.6. There is little labor supply response in the full sample, though declines for vulnerable subgroups. Spillover effects on older siblings and fertility decisions show that the policy affects the whole household, not just targeted family members.

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File URL: http://ftp.iza.org/dp10813.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 10813.

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Length: 43 pages
Date of creation: May 2017
Handle: RePEc:iza:izadps:dp10813
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