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Child Care, Parental Labor Supply and Tax Revenue

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  • Eckhoff Andresen, Martin

    (Statistics Norway)

  • Havnes, Tarjei

    (Norwegian Ministry of Finance)

Abstract

We study the impact of child care for toddlers on the labor supply of mothers and fathers in Norway. For identification, we exploit the staggered expansion across municipalities following a large reform from 2002. Our IV-estimates indicate that child care use causes an increase in the labor supply of mothers. Results suggest that cohabiting mothers move towards full time employment, while single mothers move to part time. Meanwhile, we find no impact for fathers or grandparents. We also find an increase in the taxes paid from cohabiting mothers, lending some support to the argument that parts of the cost of child care is offset by increased taxes.

Suggested Citation

  • Eckhoff Andresen, Martin & Havnes, Tarjei, 2018. "Child Care, Parental Labor Supply and Tax Revenue," IZA Discussion Papers 11576, Institute of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp11576
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    Cited by:

    1. BOUSSELIN Audrey, 2019. "Expanding access to universal childcare: Effects on childcare arrangements and maternal employment," LISER Working Paper Series 2019-11, LISER.
    2. Alexandre Laurin & Jacob Kim, 2019. "Mothers at Work: The Fiscal Implications of the Proposed Ontario Childcare Rebate," e-briefs 287, C.D. Howe Institute.
    3. 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.
    4. Emily Nix & Martin Eckhoff Andresen, 2019. "What Causes the Child Penalty? Evidence from Same Sex Couples and Policy Reforms," Discussion Papers 902, Statistics Norway, Research Department.
    5. 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.
    6. Peter Huber & Thomas Horvath & Klaus Nowotny & Margit Schratzenstaller & Silvia Rocha-Akis & Hedwig Lutz & Christine Mayrhuber, 2021. "Analysen zur rezenten Entwicklungen der Familie in Österreich. Beiträge des WIFO zum 6. Österreichischen Familienbericht 2009-2019," WIFO Studies, WIFO, number 67115, December.

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    More about this item

    Keywords

    child care; female labor supply; tax revenue; instrumental variables;
    All these keywords.

    JEL classification:

    • H24 - Public Economics - - Taxation, Subsidies, and Revenue - - - Personal Income and Other Nonbusiness Taxes and Subsidies
    • H52 - Public Economics - - National Government Expenditures and Related Policies - - - Government Expenditures and Education
    • 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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