After the introduction of the Law on Childcare in 2005, childcare subsidies in the Netherlands became much more generous. Public spending on childcare increased from 1 to 3 billion euro over the period 2004-2009. Using a differences-indifferences strategy we find that, despite the substantial budgetary outlay, this reform had only a modest impact on employment. Furthermore, the rather small effects we find are likely confounded by a coincident increase in the EITC for parents with young children of 0.6 billion euro, which presumably also served to increase the labour supply of the group. The joint reform increased the maternal employment rate by 2.3 percentage points (3.0%) and maternal hours worked by 1.1 hours per week (6.2%). The results further suggest that the reform slightly reduced hours worked by fathers.

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. The Netherlands has a unique tradition in which all major Dutch political parties provide CPB Netherlands Bureau for Economic Policy Analysis with highly detailed proposals for the tax benefit system in every national election. This information allows us to quantitatively measure the redistributive preferences of political parties. For each political party we calculate social welfare weights by income level using the inverse optimal-tax method. We find that all political parties roughly give a higher social welfare weight to the poor than to the rich. Furthermore, left-wing parties attach higher social welfare weights to the poor and lower social welfare weights to the rich than right-wing parties do. However, we also discover two anomalies. First, all political parties give a much higher social welfare weight to middle incomes than to the working and non-working poor. Second, all Dutch political parties attach a slightly negative social welfare weight to the rich by setting top rates beyond the revenue-maximizing 'Laffer' rate. Finally, we detect a strong political status quo, since social welfare weights of all political parties hardly deviate from the welfare weights that are implied by the pre-existing tax-benefit system. We argue that political-economy considerations are key in understanding the political status quo and why middle-income groups are able to lower their tax burdens at the expense of both the low-and high-income groups. Terms of use: Documents inJEL-Codes: C630, D630, H210.

We study the extension of an EITC for single mothers in the Netherlands to mothers with a youngest child 12 to 15 years old. This reform increased net income for the treatment group by 5%. Using both DD and RD we show that this reform had a negligible effect on labour participation, with tight confidence intervals around zero. Our results are at odds with a number of related studies. This is likely to be due to their use of single women without children as the control group, which in our case is an invalid control group.JEL codes: C21, H24, J22 2 The former government (Rutte-I) had plans to reverse the policy change of 2002, to reduce the budget deficit (CPB, 2010), but for the moment these plans are on hold.3 Furthermore, we also consider a 'difference-in-discontinuity' analysis, where we allow for a potential pre-reform discontinuity (although we are unaware of a reason to expect a pre-reform discontinuity at the discontinuity we consider). 4 The point estimate of the DD analysis is -0.2%-points with a 95% confidence interval [-1.4,0.9].The point estimate of the RD analysis is -0.4 (where we have reversed the sign of the coefficient since we are measuring the change in the participation rate of single mothers that do not qualify for the subsidy relative to single mothers that do qualify for the subsidy, see below), with a 95% confidence interval [-2.3,1.6].