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The Relationship between Hours of Domestic Services and Female Earnings: Panel Register Data Evidence from a Reform

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  • Halldén, Karin

    () (SOFI, Stockholm University)

  • Stenberg, Anders

    () (SOFI, Stockholm University)

Abstract

In 2007, a tax discount reform in Sweden reduced prices of outsourced domestic services (ODS) by 50 percent. Unlike most previous studies, population register data enable us to directly link a proxy for relaxed time constraints, annual changes in households' tax discounts, to changes in earnings. We find that 60 percent of married women's freed hours are applied to labor market work, which tapers off when ODS corresponds to approximately three weeks of full time work. This is substantially higher than previously reported estimates. A causal interpretation is supported by "placebo tests", and we carefully outline the assumptions required.

Suggested Citation

  • Halldén, Karin & Stenberg, Anders, 2014. "The Relationship between Hours of Domestic Services and Female Earnings: Panel Register Data Evidence from a Reform," IZA Discussion Papers 8675, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp8675
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    Cited by:

    1. Shire, Karen A. & Schnell, Rainer & Noack, Marcel, 2017. "Determinants of outsourcing domestic labour in conservative welfare states: Resources and market dynamics in Germany," Duisburger Beiträge zur soziologischen Forschung 2017-04, University of Duisburg-Essen, Institute of Sociology.
    2. Albrecht, James & Skogman Thoursie, Peter & Vroman, Susan, 2015. "Parental leave and the glass ceiling in Sweden," Working Paper Series 2015:4, IFAU - Institute for Evaluation of Labour Market and Education Policy.

    More about this item

    Keywords

    household work; outsourcing; female labor supply;

    JEL classification:

    • H2 - Public Economics - - Taxation, Subsidies, and Revenue
    • 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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