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Child Care and Mothers' Employment Decisions

  • Patricia M. Anderson
  • Phillip B. Levine

This paper will focus on the child care decisions of women who differ by their level of skill, as measured by their level of education, and the role that costs play in determining their labor force participation. Our analysis will include four separate components. First, we will review the institutional background of the market for child care, focusing mainly on the government programs targeted at less-skilled women. Second, we will conduct a descriptive analysis of the utilization and cost of child care services, paying particular attention to differences that exist among women with different levels of skill. Third, we will survey the existing evidence regarding the responsiveness of female labor supply to child care costs, reviewing both econometric studies and the results of several demonstration projects that include child care components. Finally, since the econometric studies do not focus on less-skilled women, and the responses to child care incentives from demonstration projects are difficult to interpret, we conduct our own econometric analysis. In this analysis we focus not only on variation in the response to child care cost across skill levels, but also on reconciling some of the differences in the literature. Throughout the paper, where appropriate we will reflect upon the implications of our analysis for welfare reform.

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Paper provided by Northwestern University/University of Chicago Joint Center for Poverty Research in its series JCPR Working Papers with number 64.

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Date of creation: 01 Jan 1999
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Handle: RePEc:wop:jopovw:64
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  1. Nada Eissa & Hilary Williamson Hoynes, 1998. "The Earned Income Tax Credit and the Labor Supply of Married Couples," NBER Working Papers 6856, National Bureau of Economic Research, Inc.
  2. William M. Gentry & Alison P. Hagy, 1995. "The Distributional Effects of the Tax Treatment of Child Care Expenses," NBER Working Papers 5088, National Bureau of Economic Research, Inc.
  3. Susan L. Averett & H. Elizabeth Peters & Donald M. Waldman, 1997. "Tax Credits, Labor Supply, And Child Care," The Review of Economics and Statistics, MIT Press, vol. 79(1), pages 125-135, February.
  4. Blau, David M & Robins, Philip K, 1988. "Child-Care Costs and Family Labor Supply," The Review of Economics and Statistics, MIT Press, vol. 70(3), pages 374-81, August.
  5. David M. Blau & Alison P. Hagy, 1998. "The Demand for Quality in Child Care," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 104-146, February.
  6. Connelly, Rachel, 1992. "The Effect of Child Care Costs on Married Women's Labor Force Participation," The Review of Economics and Statistics, MIT Press, vol. 74(1), pages 83-90, February.
  7. Berger, Mark C & Black, Dan A, 1992. "Child Care Subsidies, Quality of Care, and the Labor Supply of Low-Income, Single Mothers," The Review of Economics and Statistics, MIT Press, vol. 74(4), pages 635-42, November.
  8. Gordon Cleveland & Morley Gunderson & Douglas Hyatt, 1996. "Child Care Costs and the Employment Decision of Women: Canadian Evidence," Canadian Journal of Economics, Canadian Economics Association, vol. 29(1), pages 132-51, February.
  9. Mroz, Thomas A, 1987. "The Sensitivity of an Empirical Model of Married Women's Hours of Work to Economic and Statistical Assumptions," Econometrica, Econometric Society, vol. 55(4), pages 765-99, July.
  10. Kimmel, Jean, 1995. "The Effectiveness of Child-Care Subsidies in Encouraging the Welfare-to-Work Transition of Low-Income Single Mothers," American Economic Review, American Economic Association, vol. 85(2), pages 271-75, May.
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