Child Care and Early Education Research Connections

Skip to main content

Childcare assistance: Are subsidies or tax credits better?

Share
Description:
We evaluate price subsidies and tax credits for childcare. We focus on partnered women's labour supply, household income and welfare, demand for childcare and government expenditure. Using Australian data, we estimate a joint, discrete structural model of labour supply and childcare demand. We introduce two methodological innovations -- a more flexible quantity constraint that total formal and informal childcare hours are at least as large as the mother's labour supply and the explicit inclusion of maternal childcare in the utility function as a proxy for child development. We find that tax credits are more effective than subsidies in terms of increasing average hours worked and household income. However, tax credits disproportionately benefit wealthier and more educated women. Price subsidies, while less efficient, have positive redistributional effects. (author abstract)
Resource Type:
Reports & Papers
Country:
Australia

Related resources include summaries, versions, measures (instruments), or other resources in which the current document plays a part. Research products funded by the Office of Planning, Research, and Evaluation are related to their project records.

- You May Also Like

These resources share similarities with the current selection. They are found by comparing the topic, author, and resource type of the currently selected resource to the rest of the library’s publications.

Equitably financing child care for North Carolina families: Reimbursements to providers play a critical role in child care and early education

Reports & Papersview

Equitably financing child care for North Carolina families: Reimbursements to providers play a critical role in child care and early education

Reports & Papersview

Joint task force on access to quality affordable child care: Report pursuant to House Bill 2346 (2019)

Reports & Papersview