Long‐term Effects of Cash for Childcare on Mothers' Labour Supply

Marit Rønsen

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Gender, Labor, and Family Dynamics Labor market dynamics and wage inequality Work-Family Balance Challenges

Abstract

Abstract. In 1998–99 a cash benefit for 1‐ to 2‐year‐olds who do not use subsidized childcare on full‐time basis was introduced in Norway. A large‐scale appraisal shortly after introduction concluded that the effects on mothers' labour supply were surprisingly small. The more long‐term effects reported in this paper suggest that this conclusion may need modification. Almost 4 years after the reform the employment probability had declined significantly, and employed mothers were much more likely to be on leave. All in all the reduction in labour supply is estimated to be 3¾ hours per week or almost 20 per cent.

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References

1983Limited-dependent and qualitative variables in econometrics 2002The effect of child care and part time opportunities on participation and fertility decisions in Italy 1992The Effect of Child Care Costs on Married Women's Labor Force Participation 1988Child-Care Costs and Family Labor Supply 1998Child Care Costs as a Barrier to Employment for Single and Married Mothers 1992Child Care and the Labor Supply of Married Women: Reduced Form Evidence 1992Child Care Subsidies and Labor Supply in Sweden 1995A Structural Model of Child Care and the Labor Supply of Married Women

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2012Cash for Childcare Experiences from Finland, Norway and Sweden 2016Cash‐for‐care policy in Sweden: An appraisal of its consequences on female employment 2013Trapped at home: The effect of mothers' temporary labor market exits on their subsequent work career 2012Family policy and couples’ labour supply: an empirical assessment 2015Effects of Parental Leave Policies on Second Birth Risks and Women’s Employment Entry

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