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The quantitative role of child care for female labor force participation and fertility

  • Bick, Alexander
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    Consistent with facts for a cross-section of OECD countries, I document that the labor force participation rate of West German mothers with children aged zero to two exceeds the corresponding child care enrollment rate whereas the opposite is true for mothers with children aged three to mandatory school age. I develop a life-cycle model that explicitly accounts for this age-dependent relationship through various types of non-paid and paid child care. The calibrated version of the model is used to evaluate two recently passed policy reforms concerning the supply of subsidized child care for children aged zero to two in Germany. These counterfactual policy experiments suggest that the lack of subsidized child care constitutes indeed for some females a barrier to participate in the labor market and depresses fertility.

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    File URL: http://mpra.ub.uni-muenchen.de/25474/1/MPRA_paper_25474.pdf
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    Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 25474.

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    Date of creation: 09 Aug 2010
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    Handle: RePEc:pra:mprapa:25474
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    1. Larry E. Jones & Alice Schoonbroodt & Michèle Tertilt, 2010. "Fertility Theories: Can They Explain the Negative Fertility-Income Relationship?," NBER Chapters, in: Demography and the Economy, pages 43-100 National Bureau of Economic Research, Inc.
    2. Jeremy Greenwood & Nezih Guner & John Knowles, . "More on Marriage, Fertility, and the Distribution of Inocome," Penn CARESS Working Papers 65f9ffed93b3a872de23c94c2, Penn Economics Department.
    3. Apps, Patricia & Rees, Ray, 2005. "Gender, Time Use and Public Policy over the Life Cycle," IZA Discussion Papers 1855, Institute for the Study of Labor (IZA).
    4. Peter Haan & Katharina Wrohlich, 2009. "Can Child Care Policy Encourage Employment and Fertility?: Evidence from a Structural Model," Discussion Papers of DIW Berlin 935, DIW Berlin, German Institute for Economic Research.
    5. Katharina Wrohlich, 2006. "Labor Supply and Child Care Choices in a Rationed Child Care Market," Discussion Papers of DIW Berlin 570, DIW Berlin, German Institute for Economic Research.
    6. Marco Francesconi, 2002. "A Joint Dynamic Model of Fertility and Work of Married Women," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 336-380, Part.
    7. Hotz, V Joseph & Miller, Robert A, 1988. "An Empirical Analysis of Life Cycle Fertility and Female Labor Supply," Econometrica, Econometric Society, vol. 56(1), pages 91-118, January.
    8. Orazio Attanasio & Hamish Low & Virginia Sanchez-Marcos, 2008. "Explaining Changes in Female Labor Supply in a Life-Cycle Model," American Economic Review, American Economic Association, vol. 98(4), pages 1517-52, September.
    9. Daniela Del Boca & Robert M. Sauer, 2006. "Life Cycle Employment and Fertility Across Institutional Environments," CHILD Working Papers wp14_06, CHILD - Centre for Household, Income, Labour and Demographic economics - ITALY.
    10. 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, 08.
    11. Del Boca, Daniela, 2002. "The Effect of Child Care and Part Time Opportunities on Participation and Fertility Decisions in Italy," IZA Discussion Papers 427, Institute for the Study of Labor (IZA).
    12. Katharina Wrohlich, 2005. "The Excess Demand for Subsidized Child Care in Germany," Discussion Papers of DIW Berlin 470, DIW Berlin, German Institute for Economic Research.
    13. Paul Klein & David Domeij, 2008. "Should daycare be subsidized?," 2008 Meeting Papers 750, Society for Economic Dynamics.
    14. Gert G. Wagner & Joachim R. Frick & Jürgen Schupp, 2007. "The German Socio-Economic Panel Study (SOEP): Scope, Evolution and Enhancements," SOEPpapers on Multidisciplinary Panel Data Research 1, DIW Berlin, The German Socio-Economic Panel (SOEP).
    15. Tom Kornstad & Thor Thoresen, 2007. "A discrete choice model for labor supply and childcare," Journal of Population Economics, Springer, vol. 20(4), pages 781-803, October.
    16. Kydland, Finn E & Prescott, Edward C, 1982. "Time to Build and Aggregate Fluctuations," Econometrica, Econometric Society, vol. 50(6), pages 1345-70, November.
    17. Pierre Lefebvre & Philip Merrigan, 2008. "Child-Care Policy and the Labor Supply of Mothers with Young Children: A Natural Experiment from Canada," Journal of Labor Economics, University of Chicago Press, vol. 26(3), pages 519-548, 07.
    18. Tauchen, George, 1986. "Finite state markov-chain approximations to univariate and vector autoregressions," Economics Letters, Elsevier, vol. 20(2), pages 177-181.
    19. Schönberg, Uta & Ludsteck, Johannes, 2007. "Maternity Leave Legislation, Female Labor Supply, and the Family Wage Gap," IZA Discussion Papers 2699, Institute for the Study of Labor (IZA).
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