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Auriol, Emmanuelle

The B.E. Journal of Economic Analysis & Policy

Editor-in-Chief: Jürges, Hendrik / Ludwig, Sandra

Ed. by Brunner, Johann / Fleck, Robert / Mendola, Mariapia / Requate, Till / Schirle, Tammy / de Vries, Frans / Zulehner, Christine

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Volume 14, Issue 3

Issues

Volume 6 (2006)

Volume 4 (2004)

Volume 2 (2002)

Volume 1 (2001)

To Work or Not to Work? The Effect of Childcare Subsidies on the Labour Supply of Parents

Tuomas Kosonen
Published Online: 2014-05-29 | DOI: https://doi.org/10.1515/bejeap-2013-0073

Abstract

This paper studies the effect of childcare subsidies on parental labour supply. I use variation arising from changes in the municipality-specific supplement to Finnish child homecare allowance to identify the causal effect of subsidies on the labour force participation of parents. The variation in labour supply incentives is plausibly exogenous, since eligibility depends on municipal-level rules, but not on family income. Robustness checks indicate that the results are not driven by policy endogeneity or residential sorting. I find a robust result that 100 euros higher supplement per month reduces the maternal labour supply by 3 percentage points.

Keywords: parental labour supply; childcare subsidies; participation elasticity

JEL Classification: J22; J13; H22

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About the article

Published Online: 2014-05-29

Published in Print: 2014-07-01


Citation Information: The B.E. Journal of Economic Analysis & Policy, Volume 14, Issue 3, Pages 817–848, ISSN (Online) 1935-1682, ISSN (Print) 2194-6108, DOI: https://doi.org/10.1515/bejeap-2013-0073.

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