Child Care and Female Employment Decisions

Abstract

The extent to which maternal employment is influenced by the affordability of child care is the subject of empirical ambiguity in Australian studies. We contribute to this debate by examining the relationship between maternal employment decisions and child care costs using the HILDA (Household Income and Labour Dynamics in Australia) dataset. Our analysis finds that the use of child care for both employment and non-employment purposes is extensive in Australia. A key result of our analysis is that for married mothers the cost of child care is relatively unimportant in both the decision to participate in the labour market, and, given the decision to work, the number of hours worked.

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