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Child Care, Parental Labor Supply and Tax Revenue

Author

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  • Eckhoff Andresen, Martin

    () (Statistics Norway)

  • Havnes, Tarjei

    () (University of Oslo)

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 for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp11576
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    References listed on IDEAS

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    1. Michael Baker & Jonathan Gruber & Kevin Milligan, 2008. "Universal Child Care, Maternal Labor Supply, and Family Well-Being," Journal of Political Economy, University of Chicago Press, vol. 116(4), pages 709-745, August.
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    6. Maria Donovan Fitzpatrick, 2010. "Preschoolers Enrolled and Mothers at Work? The Effects of Universal Prekindergarten," Journal of Labor Economics, University of Chicago Press, vol. 28(1), pages 51-85, January.
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    13. Elizabeth U. Cascio, 2009. "Maternal Labor Supply and the Introduction of Kindergartens into American Public Schools," Journal of Human Resources, University of Wisconsin Press, vol. 44(1).
    14. Nollenberger, Natalia & Rodríguez-Planas, Núria, 2015. "Full-time universal childcare in a context of low maternal employment: Quasi-experimental evidence from Spain," Labour Economics, Elsevier, vol. 36(C), pages 124-136.
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    More about this item

    Keywords

    child care; female labor supply; tax revenue; instrumental variables;

    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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