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The Effect of a Family Policy Reform on Mother’s Pay: A Natural Experiment Approach

Pål Schøne ()

Review of Economics of the Household, 2005, vol. 3, issue 2, 145-170

Abstract: All parents in Norway with children aged one to three, who do not attend publicly subsidised day care, are entitled to a cash-for-care (CFC) subsidy. Studies have shown that the reform has reduced mother’s labour supply. In this paper we analyse wage effects of the reform. We put forward a framework for evaluating reforms when reforms are uniformly and equally accessible nation-wide. First, running a simple Difference in differences (DD) analysis, results suggest that the CFC reform has reduced the mother’s wages. However, after controlling for “the age of the child” effect, by running a triple difference approach, we no longer find any evidence of negative wage effects. Copyright Springer Science+Business Media, Inc. 2005

Keywords: child care; wages; public policy; difference-in-differences-in-differences (search for similar items in EconPapers)
Date: 2005
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DOI: 10.1007/s11150-005-0708-y

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