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Child Care and Mothers' Employment Decisions

Patricia M. Anderson

Dartmouth College - Department of Economics; National Bureau of Economic Research (NBER)

Phillip B. Levine

Wellesley College; National Bureau of Economic Research (NBER)

March 1999

NBER Working Paper No. w7058

Rising female labor force participation and recent changes to the welfare system have increased the importance of child care for all women and, particularly, the less-skilled. This paper focuses on the child care decisions of women who differ by their skill level and the role that costs play in their work decision. After reviewing government child-care programs targeted at less-skilled women, we present a descriptive analysis of current utilization and child care costs. We emphasize differences across skill groups, showing that the least-skilled women both use less costly paid care and are more likely to use unpaid care. We then survey the existing evidence regarding the responsiveness of female labor supply to child care costs, reviewing both econometric studies and demonstration projects that include child care components. To investigate variation in the response to child care cost across skill levels, we implement models similar to this past literature. We conclude that while the overall elasticity of labor force participation with respect to the market price of child care is between -0.05 and -0.35, this elasticity is larger for the least skilled women and declines with skill. Throughout the paper, we reflect upon the implications of our analysis for welfare reform.

Number of Pages in PDF File: 57

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Date posted: July 13, 2000  

Suggested Citation

Anderson, Patricia M. and Levine, Phillip B., Child Care and Mothers' Employment Decisions (March 1999). NBER Working Paper No. w7058. Available at SSRN: https://ssrn.com/abstract=227421

Contact Information

Patricia M. Anderson (Contact Author)
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Dartmouth College - Department of Economics ( email )
Hanover, NH 03755
United States
603-646-2532 (Phone)
603-646-2122 (Fax)
Phillip B. Levine
National Bureau of Economic Research (NBER)
1050 Massachusetts Avenue
Cambridge, MA 02138
United States
Wellesley College ( email )
106 Central Street
Wellesley, MA 02181
United States
781-283-2162 (Phone)
781-283-2177 (Fax)
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