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Labour Supply and Childcare: Allowing Both Parents to Choose

Karen Mumford (), Parera-Nicolau, Antonia and Pena-Boquete, Yolanda ()
Additional contact information
Parera-Nicolau, Antonia: European Commission
Pena-Boquete, Yolanda: University of Santiago de Compostela, Spain

No 12500, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: We develop and estimate a structural model of labour supply for two parent families in Australia, taking explicit account of the importance of childcare related variables. Our main contribution is to consider the labour supply decisions of both parents and their choice of childcare simultaneously. Labour supply decisions of mothers are found to be substantially more responsive to changes in their own wage (at intensive and extensive margins) than is the case for fathers, with minimal cross-wage labour supply responses from fathers. Our results imply that policies increasing the wage of mothers will be associated with marked increases in labour market participation and in the working hours of mothers in the Australian labour market, with little offsetting decline in the labour supply of fathers.

Keywords: childcare; parental labour supply; discrete; unitary (search for similar items in EconPapers)
JEL-codes: J00 J13 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-lma
Date: 2019-07
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Forthcoming in: Oxford Bulletin of Economics and Statistics

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