The Effect of Child Care Costs on Gender Inequality

Alessandra Casarico, Elena Del Rey and Jose I. Silva

No 9827, CESifo Working Paper Series from CESifo

Abstract: We develop a model to study the impact on gender gaps in participation and wages of a liquidity constraint that prevents some households from paying child care. We show that this liquidity constraint generates an inefficiency and amplifies gender gaps in the labour market. In this framework, an extension of paid maternity leave duration has ambiguous effects on gender inequality. In contrast, child care subsidies, which require higher taxes, and loans, which do not, unambiguously reduce gender inequality. We illustrate the mechanisms at play in a numerical example using Spanish data.

Keywords: liquidity constraints; gender wage and participation gaps; statistical discrimination; numerical example (search for similar items in EconPapers)
JEL-codes: J13 J16 J18 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-dem, nep-eur, nep-gen and nep-lab
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_9827

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