With Strings Attached: Grandparent-Provided Child care, Fertility, and Female Labor Market Outcomes

Eva Garcia-Moran and Zoe Kuehn ()
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Eva Garcia-Moran: The Center for Economic and Political Research on Aging , University of Lugano
Zoe Kuehn: Departmento de Economia Cuantitativa, Universidad Complutense de Madrid.

CEPRA working paper from USI Università della Svizzera italiana

Abstract: Grandparents are regular providers of free child care. Similar to any other form of child care, availability of grandparent-provided child care affects fertility and labor market decisions of women positively. We find that women in Germany, residing close to parents or in-laws are more likely to have children and that as mothers they are more likely to hold a regular part-or fulltime job. However, different from any other type of child care, for individuals to enjoy grandparent-provided child care on a regular basis, residence choices must coincide with those of parents or in-laws. Thus while living close provides access to free child care, it imposes costly spatial restrictions. We find that hourly wages of mothers residing close to parents or in-laws are lower compared to those residing further away, and having relatives taking care of ones' children increases the probability of having to commute. We build a general equilibrium model of residence choice, fertility decisions, and female labor force participation that can account for the relationships between grandparent-provided child care, fertility and female labor market outcomes. We simulate our model to analyze how women's decisions on residence, fertility, and labor force participation change under distinct scenarios regarding availability of grandparent provided childcare and different family policies.

Keywords: informal child care; fertility; labor force participation; spatial restrictions; regional labor markets (search for similar items in EconPapers)
JEL-codes: H42 J13 J61 R23 (search for similar items in EconPapers)
Pages: 53 pages
Date: 2012-09
New Economics Papers: this item is included in nep-dem, nep-eur and nep-lab
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (12)

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