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With Strings Attached: Grandparent-Provided Child care, Fertility, and Female Labor Market Outcomes

  • Eva Garcia-Moran

    (The Center for Economic and Political Research on Aging , University of Lugano)

  • Zoe Kuehn

    ()

    (Departmento de Economia Cuantitativa, Universidad Complutense de Madrid.)

Registered author(s):

    Grandparents are regular providers of free child care. Similar to any other form of child care, availability of grandparent-provided child care affects fertility and labor market decisions of women positively. We find that women in Germany, residing close to parents or in-laws are more likely to have children and that as mothers they are more likely to hold a regular part-or fulltime job. However, different from any other type of child care, for individuals to enjoy grandparent-provided child care on a regular basis, residence choices must coincide with those of parents or in-laws. Thus while living close provides access to free child care, it imposes costly spatial restrictions. We find that hourly wages of mothers residing close to parents or in-laws are lower compared to those residing further away, and having relatives taking care of ones' children increases the probability of having to commute. We build a general equilibrium model of residence choice, fertility decisions, and female labor force participation that can account for the relationships between grandparent-provided child care, fertility and female labor market outcomes. We simulate our model to analyze how women's decisions on residence, fertility, and labor force participation change under distinct scenarios regarding availability of grandparent provided childcare and different family policies.

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    File URL: http://doc.rero.ch/lm.php?url=1000,42,6,20120917145906-EZ/CEPRA_02_2012.pdf
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    Paper provided by USI Università della Svizzera italiana in its series CEPRA working paper with number 1202.

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    Length: 53 pages
    Date of creation: Sep 2012
    Date of revision:
    Handle: RePEc:lug:wcepra:1202
    Contact details of provider: Web page: https://www.bul.sbu.usi.ch

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    1. Mörk, Eva & Sjögren, Anna & Svalelryd, Helena, 2008. "Cheaper child care, more children," Working Paper Series 2008:29, IFAU - Institute for Evaluation of Labour Market and Education Policy.
    2. Tarjei Havnes & Magne Mogstad, 2011. "No Child Left Behind: Subsidized Child Care and Children's Long-Run Outcomes," American Economic Journal: Economic Policy, American Economic Association, vol. 3(2), pages 97-129, May.
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    12. Peter Rupert, Elena Stancanelli, Etienne Wasmer, 2009. "Commuting, Wages and Bargaining Power," THEMA Working Papers 2009-02, THEMA (THéorie Economique, Modélisation et Applications), Université de Cergy-Pontoise.
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