Brewer, M., A. Duncan, A. Shephard, and M. Suaréz. 2006. “Did Working Families’ Tax Credit Work? The Impact of in-Work Support on Labour Supply in Great Britain.” Labour Economics 13:699–720.CrossrefGoogle Scholar
Eissa, N. 1995. “Taxation and Labor Supply of Married Women: The Tax Reform Act of 1986 as a Natural Experiment.” NBER Working Paper 5023.Google Scholar
Felfe, C., M. Lechner, and P. Thiemann. 2013. “After-School Care and Parents’ Labor Supply.” IZA Discussion Paper, No. 7768.Google Scholar
Gathmann, C., and B. Sass. 2012. “Taxing Childcare: Effects on Family Labor Supply and Children.” IZA Discussion Paper No. 6440.Google Scholar
Gonzalez, L. 2013. “The Effect of a Universal Child Benefit on Conceptions, Abortions, and Early Maternal Labor Supply.” American Economic Journal: Economic Policy 5(3):160–88.Web of ScienceGoogle Scholar
Lefebvre, P., and P. Merrigan. 2008. “Child-Care Policy and the Labour Supply of Mothers with Young Children: A Natural Experiment from Canada.” Journal of Labour Economics 26(3):519–48.Web of ScienceCrossrefGoogle Scholar
Milligan, K., and M. Stabile. 2007. “The Integration of Child Tax Credits and Welfare: Evidence from the Canadian National Child Benefit Program.” Journal of Public Economics, Elsevier 91(1–2):305–26.CrossrefGoogle Scholar
Mirrlees Review. 2011. “Tax by Design: The Mirrlees Review.” In Tax by design, edited by J. Mirrlees, S. Adam, T. Besley, R. Blundell, S. Bond, R. Chote, M. Gammie, P. Johnson, G. Myles, and J. Poterba. Oxford: Oxford University Press.Google Scholar
Nollenberger, N., and N. Rodríguez-Planas. 2011. “Child Care, Maternal Employment and Persistence: A Natural Experiment from Spain.” IZA Discussion Paper No. 5888.Google Scholar
OECD. 2009. “Pensions at a Glance 2009: Retirement-Income Systems in OECD Countries.”Google Scholar
Viitanen, T. 2007. “Childcare Voucher and Labour Market Behaviour: Experimental Evidence From Finland.” Sheffield Economic Research Paper Series, SERP Number: 2007011, UK.Google Scholar
About the article
Published Online: 2014-05-29
Published in Print: 2014-07-01
This is subsidized from a different allowance, the private daycare allowance, and is more attractive for the third party (the carer).
This is stated in legislation. Before 1995 the law stated that every child under the age of 4 is entitled to a place in public daycare.
This system has been in place nationwide since 1997. Between 1995 and 1997 there was an experiment in 33 municipalities that provided a similar allowance. Viitanen (2007) found a positive effect on the use of private daycare, but little effect on labour force participation.
In some rare cases the supplement does depend on family income. Excluding such municipalities does not change the results, and these cases are not part of the main analysis.
There are cities in both supplement and no-supplement municipalities. However, supplement municipalities are on average more populous.
In the rotating panel each household is surveyed in two consecutive years and each year half of the sample consists of new households. Thus there are two consecutive observations for each individual.
More specifically I measured income for women between 20 and 59 years old and not on sick leave, retired or otherwise outside of the labour force.
The average net-of-tax income per month for a woman working full time is around 1,500 (own calculations).
Some of the municipal supplement rules were simplified in order to be able to calculate the leads and lags, like removing the age restrictions of the sibling extras to the supplement. These simplifications do not affect the euro amounts of the supplement much and, more importantly, do not delete or create any reforms to supplement policies. The regression included municipal and year dummies, as well as dummies for every 2 years of age of the youngest child and controls for characteristics of the mother.
Finnish municipalities are typically large in surface area. Thus moving to another municipality usually means moving to a completely different city or town.
The other definition is the number of months worked as based on a survey question. The results for this are shown in Table 11. There is a measurement error in this variable, thus I did not use it in the main estimates.
For participation essentially the same set of results emerged when the participation threshold was defined as 30% of the mean income of the education group.