A Structural Model of Labor Supply and Child Care Demand

Michalopoulos, Charles; Robins, Philip K.; Garfinkel, Irwin

doi:10.2307/145916

Cited by 193 publications

(144 citation statements)

References 14 publications

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“…e.g. Michalopoulos, Robins and Garfinkel (1992), argue that free care is available for all mothers since one always can choose to leave the children alone while working, but this possibility is ignored here.…”

Section: Markets For Carementioning

confidence: 99%

“…Cogan 1980) nor measured as a flat hourly expense, as in Connelly (1992) and in Michalopoulos, Robins and Garfinkel (1992). The approach here yields child care expenses between these two extremes.…”

Section: The Empirical Specificationmentioning

confidence: 99%

“…Labor supply analyses that encompass child care choices in the decision-making framework include, e.g., Blau and Robins (1988); Ermisch (1989);Hofferth and Wissoker (1992); Connelly (1992); Michalopoulos, Robins and Garfinkel (1992); Gustafsson and Stafford (1992); Ribar (1992Ribar ( , 1995; Averett, Peters and Waldman (1997); Kimmel (1998);Powell (1998); Blau and Hagy (1998).…”

Section: Introductionmentioning

confidence: 99%

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A discrete choice model for labor supply and childcare

2005

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Abstract:A discrete choice model for labor supply and child care for mothers of preschoolers is presented. The mothers are assumed to make choices from a finite set of job possibilities and from a finite set of child care options. The options in the markets for child care are characterized by opening hours, fees and a number of quality attributes, such as mode of care. Similarly, jobs are characterized by a (fixed) wage rate, working hours and a number of variables related to job satisfaction. In the estimation of the model we take into account that the number of options available might vary across work/care combinations, and that some mothers are rationed in the market for care at day care centers. The model is employed to simulate the female labor supply effects of the Norwegian home care allowance reform. Norway aim at improving work incentives for parents. However, they opted for a different approach when a "home care allowance" was introduced in 1998 that strengthen incentives to parents to provide care at home for their young preschoolers. The "home care allowance" gives parents of preschool children aged 1-2 years a transfer in cash, that depends on utilization of public or private day care centers: non-users are eligible to 36,000 Norwegian kroner (about 4,000 U.S. dollars) per year and per child in support, while provisions are scaled down to nil for users of full-time center-based care. 2 In effect, this means a substantial price increase of center-based care relative to the costs of other modes of care, i.e., other paid care and parental care. We expect that this policy change will reduce female labor supply. The total effect on labor supply is, however, not easily assessed since it depends, among other things, on the extent to which parents consider other paid care alternatives as an acceptable substitute for care at centers. KeywordsThe purpose of this paper is to develop and estimate a decision model for female labor supply and child care choices in order to predict the female labor supply responses of this policy change. We focus on mothers since they are assumed to be the primary caregiver and since results from empirical studies suggest that females are more responsive to changes in taxes and transfers than men.3 While traditional models of labor supply focus on the adjustment of hours spent at work and leisure, the literature on child care choices and labor supply emphasises that market work for 1 These figures apply to children 1-5 years old. Thanks to a generous maternity leave provisions, very few children attend day care centers in their first year. Children start school in their sixth year. 2 The term "home care allowance" is in accordance with the terminology used in Ilmakunnas (1997). However, the transfer might rather be characterised as an "out-of-child care center allowance". 3 There are, however, signs of convergence of opinions between the sexes in Norway regarding child care and outside work, which could mean that male income should also be treated as endogenous in future model pr...

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Section: Markets For Carementioning

confidence: 99%

Section: The Empirical Specificationmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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A discrete choice model for labor supply and childcare

2005

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“…However, these variables are more appropriately thought of as inputs to the production of quality, and as such do not belong in the cost function. 2 In other contexts, the quality of child care purchased by a family has been treated as exogenous (Ribar, 1995), as equivalent to the family's expenditure on child care (Michalopoulos, Robins, & Garfinkel, 1992), as an unobserved variable proxied by the mode of care, such as day care center, family day care home, and so on (Leibowitz, Waite, & Witsberger, 1988), or as an unobserved choice variable (Blau & Robins, 1988;Connelly, 1992). In this paper, we take a different approach.…”

Section: Introductionmentioning

confidence: 99%

The Production of Quality in Child Care Centers

Blau¹

1997

The Journal of Human Resources

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Abstract-We use data from a sample of child care centers to estimate the relationships between cost and child care quality, and between revenue and quality. We use a measure of child care quality, designed by developmental psychologists, that is positively associated with child development. Taking the estimated cost-quality and revenue-quality relationships as given, we estimate the objective functions of firms and compute the quality supply function. The results indicate that the supply of quality is moderately elastic with respect to price and the wages of child care center workers. Implications of the results for child care policy are discussed.

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“…27, number 1). This issue contains articles by Ribar (1992), Michalopoulos et al (1992), Blau (1992) and Gustafsson and Stafford (1992), who study the relationship between child care and labor supply. The observation that tax financed public goods might increase rather than decrease total labor supply was suggested and analyzed by Atkinson and Stern (1974).…”

Section: Introductionmentioning

confidence: 99%

The political economy of subsidized day care

Bergstrom

Blomquist

1996

European Journal of Political Economy

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This paper presents a theoretical model of political support for public provision of day care. In an economy where there are high taxes on wage income, selfish taxpayers with no children in the day care system may favor substantial public subsidies to day care because such subsidies induce mothers to join the labor force and hence pay income tax. Our model makes explicit quantitative predictions of the relation between the distribution of wages, the income tax rate, and the subsidy rate for day care that maximizes net tax revenue from parents of small children. Applying parameter values from Sweden and the United States, we find that our model predicts a subsidy rate of between 50% and 100% for Sweden with its high tax rate on wages and between 15% and 30% for the U.S. with its lower tax rate on wages.JEL classification: H42; J13; J22

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A Structural Model of Labor Supply and Child Care Demand

Cited by 193 publications

References 14 publications

A discrete choice model for labor supply and childcare

A discrete choice model for labor supply and childcare

The Production of Quality in Child Care Centers

The political economy of subsidized day care

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