Availability and Price of High Quality Day Care and Female Employment

Aarhus University Economics Paper No. 2005-08

41 Pages Posted: 2 Apr 2006

See all articles by Marianne Simonsen

Marianne Simonsen

Aarhus University - Department of Economics and Business

Date Written: April 2006

Abstract

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.

Keywords: Child care, prices, waiting lists, local variation, female employment

JEL Classification: J13, J22, J38

Suggested Citation

Simonsen, Marianne, Availability and Price of High Quality Day Care and Female Employment (April 2006). Aarhus University Economics Paper No. 2005-08, Available at SSRN: https://ssrn.com/abstract=894561 or http://dx.doi.org/10.2139/ssrn.894561

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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