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

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  • Gathmann, Christina

    (LISER)

  • Sass, Björn

    (University of Mannheim)

Abstract

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.

Suggested Citation

  • Gathmann, Christina & Sass, Björn, 2017. "Taxing Childcare: Effects on Childcare Choices, Family Labor Supply and Children," IZA Discussion Papers 10813, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp10813
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    Cited by:

    1. Sandner, Malte & Thomsen, Stephan L., 2018. "The Effects of Universal Public Childcare Provision on Cases of Child Neglect and Abuse," IZA Discussion Papers 11687, Institute of Labor Economics (IZA).
    2. Busse, Anna & Gathmann, Christina, 2018. "Free Daycare and its Effects on Children and their Families," IZA Discussion Papers 11269, Institute of Labor Economics (IZA).
    3. Gerhard Glomm & Volker Meier, 2020. "Efficient child care subsidies: any need for cash for care?," Review of Economics of the Household, Springer, vol. 18(3), pages 773-793, September.
    4. Collischon, Matthias & Kühnle, Daniel & Oberfichtner, Michael, 2020. "Cash-for-care, or caring for cash? The effects of a home care subsidy on maternal employment, childcare choices, and children s development," IAB Discussion Paper 202025, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    5. David Koll & Dominik Sachs & Fabian Stuermer-Heiber & Helene Turon, 2019. "The fiscal return to childcare policies," 2019 Meeting Papers 1081, Society for Economic Dynamics.
    6. Huebener, Mathias & Pape, Astrid & Spiess, C. Katharina, 2020. "Parental labour supply responses to the abolition of day care fees," Journal of Economic Behavior & Organization, Elsevier, vol. 180(C), pages 510-543.
    7. Gordon, James A. & Herbst, Chris M. & Tekin, Erdal, 2021. "Who's minding the kids? Experimental evidence on the demand for child care quality," Economics of Education Review, Elsevier, vol. 80(C).
    8. Pierre Pora, 2020. "Keep Working and Spend Less? Collective Childcare and Parental Earnings in France," EconomiX Working Papers 2020-29, University of Paris Nanterre, EconomiX.
    9. 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.
    10. Herbst, Chris M. & Desouza, Kevin C. & Alashri, Saud & Kandala, Srinivasa Srivatsav & Khullar, Mayank & Bajaj, Vikash, 2018. "What Do Parents Value in a Child Care Provider? Evidence from Yelp Consumer Reviews," IZA Discussion Papers 11741, Institute of Labor Economics (IZA).
    11. Aalto, Aino-Maija & Mörk, Eva & Sjögren, Anna & Svaleryd, Helena, 2019. "Does childcare improve the health of children with unemployed parents? Evidence from Swedish childcare access reform," Working Paper Series 2019:1, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    12. Stuth, Stefan, 2019. "Führt Elternschaft in prekäre Beschäftigung?," EconStor Open Access Articles and Book Chapters, ZBW - Leibniz Information Centre for Economics, pages 44-57.
    13. Jin, Zhangfeng & Pan, Shiyuan & Zheng, Zhijie, 2021. "The Unintended Consequences of Relaxing Birth Quotas: Theory and Evidence," GLO Discussion Paper Series 819, Global Labor Organization (GLO).
    14. Thushyanthan Baskaran & Zohal Hessami, 2019. "Competitively Elected Women as Policy Makers," CESifo Working Paper Series 8005, CESifo.

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    More about this item

    Keywords

    female labor supply; family policy; childcare; Germany;
    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
    • J18 - Labor and Demographic Economics - - Demographic Economics - - - Public Policy

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