Child care costs, household liquidity constraints, and gender inequality

Alessandra Casarico, Elena Del Rey and José Silva

Journal of Population Economics, 2023, vol. 36, issue 3, No 11, 1487 pages

Abstract: Abstract In a model with endogenous female labour supply and wages, we show that liquidity constraints that prevent households from buying child care generate an inefficiency and amplify gender gaps in the labour market. We evaluate the relative merits of paid maternity leave, child care subsidies, and government loans in mitigating liquidity constraints and promoting gender equality. While an extension in the duration of the leave has ambiguous effects, child care subsidies and loans in the form of child care vouchers remove the liquidity constraints and reduce gender gaps in participation and wages. 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: 2023
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Downloads: (external link)
http://link.springer.com/10.1007/s00148-023-00936-2 Abstract (text/html)
Access to the full text of the articles in this series is restricted.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:spr:jopoec:v:36:y:2023:i:3:d:10.1007_s00148-023-00936-2

Ordering information: This journal article can be ordered from
http://www.springer. ... tion/journal/148/PS2

DOI: 10.1007/s00148-023-00936-2

Access Statistics for this article

Journal of Population Economics is currently edited by K.F. Zimmermann

More articles in Journal of Population Economics from Springer, European Society for Population Economics Contact information at EDIRC.
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().