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Cheaper Child Care, More Children

  • Mörk, Eva

    ()

    (Uppsala University)

  • Sjögren, Anna

    ()

    (IFAU)

  • Svaleryd, Helena

    ()

    (Research Institute of Industrial Economics)

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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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3942.

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Length: 40 pages
Date of creation: Jan 2009
Date of revision:
Handle: RePEc:iza:izadps:dp3942
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  1. Kevin Milligan, 2002. "Subsidizing the Stork: New Evidence on Tax Incentives and Fertility," NBER Working Papers 8845, National Bureau of Economic Research, Inc.
  2. Daniela Del Boca, 2002. "The effect of child care and part time opportunities on participation and fertility decisions in Italy," Journal of Population Economics, Springer, vol. 15(3), pages 549-573.
  3. Melissa Schettini Kearney, 2004. "Is There an Effect of Incremental Welfare Benefits on Fertility Behavior?: A Look at the Family Cap," Journal of Human Resources, University of Wisconsin Press, vol. 39(2).
  4. Elinder, Mikael & Jordahl, Henrik & Poutvaara, Panu, 2008. "Selfish and Prospective: Theory and Evidence of Pocketbook Voting," IZA Discussion Papers 3763, Institute for the Study of Labor (IZA).
  5. Apps, Patricia & Rees, Ray, 2001. "Fertility, Female Labor Supply and Public Policy," IZA Discussion Papers 409, Institute for the Study of Labor (IZA).
  6. Jeffrey Smith & Petra Todd, 2003. "Does Matching Overcome Lalonde's Critique of Nonexperimental Estimators?," University of Western Ontario, CIBC Centre for Human Capital and Productivity Working Papers 20035, University of Western Ontario, CIBC Centre for Human Capital and Productivity.
  7. 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.
  8. Anders Björklund, 2006. "Does family policy affect fertility?," Journal of Population Economics, Springer, vol. 19(1), pages 3-24, February.
  9. Joshua Angrist & Victor Lavy & Analia Schlosser, 2010. "Multiple Experiments for the Causal Link between the Quantity and Quality of Children," Journal of Labor Economics, University of Chicago Press, vol. 28(4), pages 773-824, October.
  10. 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).
  11. Ermisch, John F, 1988. "Purchased Child Care, Optimal Family Size and Mother's Employment," CEPR Discussion Papers 238, C.E.P.R. Discussion Papers.
  12. Lundin, Daniela & Mörk, Eva & Öckert, Björn, 2008. "How far can reduced childcare prices push female labour supply?," Labour Economics, Elsevier, vol. 15(4), pages 647-659, August.
  13. Guy Laroque & Bernard Salanié, 2003. "Fertility and Financial Incentives in France," Working Papers 2003-32, Centre de Recherche en Economie et Statistique.
  14. Alicia Adsera, 2005. "Vanishing Children: From High Unemployment to Low Fertility in Developed Countries," American Economic Review, American Economic Association, vol. 95(2), pages 189-193, May.
  15. 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.
  16. Alícia Adserà, 2004. "Changing fertility rates in developed countries. The impact of labor market institutions," Journal of Population Economics, Springer, vol. 17(1), pages 17-43, February.
  17. David Blau & Philip Robins, 1989. "Fertility, Employment, and Child-Care Costs," Demography, Springer, vol. 26(2), pages 287-299, May.
  18. Francesc Trillas, 2008. "Regulatory federalism in network industries," Working Papers 2008/8, Institut d'Economia de Barcelona (IEB).
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