THE IMPACT OF CHILDCARE COSTS ON THE FULL-TIME/PART-TIME EMPLOYMENT DECISIONS OF AUSTRALIAN MOTHERS

Anu Rammohan and Stephen Whelan

Australian Economic Papers, 2007, vol. 46, issue 2, pages 152-169

Abstract: Using data from the HILDA (Household Income and Labour Dynamics), this paper examines the implications of childcare costs on maternal employment status by distinguishing between full-time and part-time work. Our empirical approach uses an ordered probit model taking into account the endogeneity associated with both wages and childcare costs. Results indicate that childcare costs have a statistically insignificant effect on the decision to work either full time or part time. Moreover, the reported elasticities of part-time and full-time work with respect to childcare costs are relatively low. Finally, our results indicate that Australian mothers respond to an increase in wages by increasing both their full-time and part-time employment. Conversely, an increase in the number of young children (particularly under four years of age) and an increase in non-labour income reduce the likelihood of the mother is observed to be working. Copyright 2007 The Authors
Journal compilation 2007 Blackwell Publishing Ltd/University of Adelaide and Flinders University .

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