Female Employment and Childcare

Lena Hassani Nezhad ()
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Lena Hassani Nezhad: City St George's, University of London

No 13839, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Childcare and women's employment decisions are intimately linked. I develop a dynamic model designed to analyse the effects of childcare subsidies on labour supply, fertility, marriage, and childcare decisions in a collective setting. In the model, children are a household good, produced by both parental time and time in childcare. Couples cannot commit to insure one another against the lower wages and lower consumption associated with spending time with a child. I estimate the model using the Panel Study of Income Dynamics in the United States to evaluate the impact of childcare subsidy programmes on various life-cycle outcomes of women and men. Offering a 10 percent childcare subsidy expands the labour supply of single women from lower-education backgrounds by 5.4 percent while married women, and higher-educated single women, respond much less. Finally, I show that there are large increases in childcare take-up associated with childcare subsidies, which improves the quality of children as a household good. This increases gains from marriage and results in an increase in the married fraction of the sample.

Keywords: collective household models; childcare; female labour supply (search for similar items in EconPapers)
JEL-codes: D13 J12 J13 J22 J24 (search for similar items in EconPapers)
Pages: 55 pages
Date: 2020-11
New Economics Papers: this item is included in nep-dge and nep-lma
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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