Description:
We ask whether cheaper child care can spur labour supply of mothers in an economy with high female labour supply. We exploit exogenous variation in child care prices induced by a public reform. A triple difference approach is put forward. The results show that reduced child care prices led to a rise in labor supply of mothers by approximately 5 percent. A "back-of-the-envelope" calculation estimates an elasticity of approximately -0.25, which is at the lower end compared to other studies, suggesting that labour supply is less elastic when female employment is high. Since a capacity-increase was introduced at the same time, the positive labour supply effect may be a result of both reduced prices and increased capacity. (author abstract)
Resource Type:
Reports & Papers
Publisher(s):
Country:
Norway