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Support for market care: comparing child cash and tax benefits

Jérôme De Henau, Danièle Meulders and Síle O'Dorchai ()

ULB Institutional Repository from ULB -- Universite Libre de Bruxelles

Abstract: Introduction Besides public childcare provision and maternity/paternity leave arrangements, a third way for the state to intervene in the childcare sphere is to grant benefits to families with young children. These could help them finance the cost of childcare purchased on the market or cover part of their child-related expenses. However, the problem with this support is the broad use that parents can make of it. On the one hand, financial support can help families buy care time on the market and thus allow both parents to work (e.g. Del Boca et al. 2003; Viitanen 2005). On the other hand, when benefits are not issued for the specific purpose of purchasing market care, they can and are used to pay for other needs (food, clothes, etc.). A possible effect, which is very important from the gender point of view, is that, if financial support is perceived as being too generous, it risks inducing mothers to quit the labour market (e.g. Lewis and Ostner 1994; Naz 2004). The effect of such support on the work/family balance is then less clear. In the following sections we will present indicators that measure purely financial generosity, knowing that it should be kept in mind that ‘general’ cash or tax benefits have an ambiguous effect.

Date: 2007
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Handle: RePEc:ulb:ulbeco:2013/9299