Cheaper Child Care, More Children

40 Pages Posted: 19 Jan 2009

See all articles by Eva Moerk

Eva Moerk

IFAU - Institute for Labour Market Policy Evaluation; Uppsala University - Department of Economics; IZA Institute of Labor Economics

Anna Sjögren

IFAU - Institute for Labour Market Policy Evaluation; Stockholm University - Swedish Institute for Social Research (SOFI)

Helena Svaleryd

Uppsala University

Abstract

We study the effect of child care costs on the fertility behavior of Swedish women and find that reductions in child care charges influence fertility decisions, even when costs are initially highly subsidized. Exploiting the exogenous variation in child care costs caused by a Swedish child care reform, we are able to identify the causal effect of child care costs on fertility in a context in which child care enrolment is almost universal and the labor force participation of mothers is very high. A typical household planning another child experienced a reduction in expected future child care costs of SEK 106,000 (USD 17,800). This reduction resulted in 3-5 more child births per 1,000 women during an 18 month period, which corresponds to a 4-6 per cent increase in the birth rate.

Keywords: child care, cost of children, fertility, quasi-experiment, difference-in-differences

JEL Classification: H31, J13

Suggested Citation

Moerk, Eva and Sjoegren, Anna and Svaleryd, Helena, Cheaper Child Care, More Children. IZA Discussion Paper No. 3942, Available at SSRN: https://ssrn.com/abstract=1329580 or http://dx.doi.org/10.2139/ssrn.1329580

Eva Moerk (Contact Author)

IFAU - Institute for Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden

Uppsala University - Department of Economics ( email )

Box 513
SE-75120 Uppsala
Sweden

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Anna Sjoegren

IFAU - Institute for Labour Market Policy Evaluation ( email )

Box 513
751 20 Uppsala
Sweden

Stockholm University - Swedish Institute for Social Research (SOFI) ( email )

Kyrkgatan 43B
SE-106 91 Stockholm
Sweden

Helena Svaleryd

Uppsala University ( email )

P.O. Box 513
Uppsala, 75120
Sweden

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