Availability and Price of High Quality Day Care and Female Employment
Aarhus University - Department of Economics and Business
Aarhus University Economics Paper No. 2005-08
Using local variation between municipalities I analyse the degree to which availability and price of high quality publicly subsidised child care affect female employment following maternity leave. Importantly, prices are income dependent and thus likely endogenous, yet by exploiting information on minimum income compensation during non-employment I bypass this problem. The results show that guaranteed access to day care has a significantly positive effect on employment whereas the price effect is significantly negative: An increase in the price of 1 euro will decrease employment by 0.08% corresponding to a price elasticity of -0.17. These effects prevail during the first 12 months after childbirth.
Number of Pages in PDF File: 41
Keywords: Child care, prices, waiting lists, local variation, female employment
JEL Classification: J13, J22, J38working papers series
Date posted: April 2, 2006
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