The Relationship between Hours of Domestic Services and Female Earnings: Panel Register Data Evidence from a Reform

42 Pages Posted: 6 Dec 2014

See all articles by Karin Halldén

Karin Halldén

Stockholm University - Swedish Institute for Social Research (SOFI)

Anders Stenberg

Stockholm University - Swedish Institute for Social Research (SOFI)

Abstract

In 2007, a tax discount reform in Sweden reduced prices of outsourced domestic services (ODS) by 50 percent. Unlike most previous studies, population register data enable us to directly link a proxy for relaxed time constraints, annual changes in households' tax discounts, to changes in earnings. We find that 60 percent of married women's freed hours are applied to labor market work, which tapers off when ODS corresponds to approximately three weeks of full time work. This is substantially higher than previously reported estimates. A causal interpretation is supported by "placebo tests", and we carefully outline the assumptions required.

Keywords: household work, outsourcing, female labor supply

JEL Classification: H2, J13, J22

Suggested Citation

Halldén, Karin and Stenberg, Anders, The Relationship between Hours of Domestic Services and Female Earnings: Panel Register Data Evidence from a Reform. IZA Discussion Paper No. 8675. Available at SSRN: https://ssrn.com/abstract=2534703

Karin Halldén (Contact Author)

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

Kyrkgatan 43B
SE-106 91 Stockholm
Sweden

Anders Stenberg

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

Kyrkgatan 43B
SE-106 91 Stockholm
Sweden

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