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Maternal Employment, Fertility, Child Care Use, and Cognitive Outcomes of Children: Evidence from a Norwegian Reform

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  • Kai Liu

    (Norwegian school of economics)

  • Marc Chan

    (University of Technology Sydney)

Abstract

In 1998, Norway implemented the cash-for-care reform ("kontant stoette"), which provided cash to families with young children who did not use government-subsidized child care facilities. The reform resulted in a sizable exogenous change in the relative price of child care facilities, which interacted with pre-existing regional variations in the child care system. Using administrative data from 1995 to 2010, we examine the effects of the reform by estimating a dynamic structural model of maternal employment, fertility, and child care use for multiple children. We investigate the effects of such behavioral changes on the long-run cognitive outcomes of children, by estimating a cognitive ability production function with data on national test scores. Numerical results from several counterfactual exercises, including budget analysis, are presented. In particular, we compare the effects of existing and alternative child care polices with the effects of the maternity leave system.

Suggested Citation

  • Kai Liu & Marc Chan, 2014. "Maternal Employment, Fertility, Child Care Use, and Cognitive Outcomes of Children: Evidence from a Norwegian Reform," 2014 Meeting Papers 593, Society for Economic Dynamics.
    • Handle: RePEc:red:sed014:593
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    References listed on IDEAS

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    1. Gary S. Becker & H. Gregg Lewis, 1974. "Interaction between Quantity and Quality of Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 81-90, National Bureau of Economic Research, Inc.
    2. Daniela Del Boca & Christopher Flinn & Matthew Wiswall, 2014. "Household Choices and Child Development," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 81(1), pages 137-185.
    3. Raquel Bernal, 2008. "The Effect Of Maternal Employment And Child Care On Children'S Cognitive Development," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 49(4), pages 1173-1209, November.
    4. Pål Schøne, 2004. "Labour supply effects of a cash-for-care subsidy," Journal of Population Economics, Springer;European Society for Population Economics, vol. 17(4), pages 703-727, December.
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