Price of High-Quality Daycare and Female Employment

25 Pages Posted: 4 Aug 2010

See all articles by Marianne Simonsen

Marianne Simonsen

Aarhus University - Department of Economics and Business

Date Written: 2010-02

Abstract

Using local variation between municipalities, I analyze the degree to which the price of high-quality publicly subsidized childcare affects 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 the price negatively affects employment. A price increase of 1 per month decreases employment by 0.08%, which corresponds to a price elasticity of −0.17. These effects prevail during the first 12 months after childbirth. I also find that availability of childcare increases employment.

Suggested Citation

Simonsen, Marianne, Price of High-Quality Daycare and Female Employment (2010-02). Scandinavian Journal of Economics, Vol. 112, Issue 3, pp. 570-594, September 2010, Available at SSRN: https://ssrn.com/abstract=1653062 or http://dx.doi.org/10.1111/j.1467-9442.2010.01617.x

Marianne Simonsen (Contact Author)

Aarhus University - Department of Economics and Business ( email )

Building 326
DK-8000 Aarhus C
Denmark
+45 8942 1599 (Phone)

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