Childcare Subsidies and Household Labor Supply

Nezih Guner, Remzi Kaygusuz, Gustavo Ventura

Research output: Working paperOther research output

Abstract

What would be the aggregate e§ects of adopting a more generous and universal
childcare subsidy program in the U.S.? We answer this question in a life-cycle equilibrium model with joint labor-supply decisions of married households along extensive and intensive margins, heterogeneity in terms of the presence of children across households and skill losses of females associated to non participation. We find that subsidies have substantial effects on female labor supply, that are largest at the bottom of the skill distribution. Fully subsidized childcare available to all households leads to long-run increases in the participation of married females and total hours worked by about 10.1% and 1.0%, respectively. There are large differences across households in welfare gains, as a small number of households - poorer households with children - gain significantly while others lose. Welfare gains of newborn households amount to 1.9%. Our findings are robust to differences among households in fertility and childcare expenditures.
Original languageEnglish
Place of PublicationBarcelona
PublisherUniversitat Autonoma de Barcelona
Number of pages61
Publication statusPublished - Nov 2013
Externally publishedYes

Publication series

NameBarcelona GSE Working Paper Series
Volume738

Fingerprint

Subsidies
Household
Child care
Household labor supply
Participation
Welfare gains
Intensive margin
Labor supply
Life cycle
Hours worked
Fertility
Expenditure
Female labor supply
Extensive margin

Keywords

  • Childcare
  • Household labor supply

Cite this

Guner, N., Kaygusuz, R., & Ventura, G. (2013). Childcare Subsidies and Household Labor Supply. (Barcelona GSE Working Paper Series; Vol. 738). Barcelona: Universitat Autonoma de Barcelona.
Guner, Nezih ; Kaygusuz, Remzi ; Ventura, Gustavo. / Childcare Subsidies and Household Labor Supply. Barcelona : Universitat Autonoma de Barcelona, 2013. (Barcelona GSE Working Paper Series).
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Guner, N, Kaygusuz, R & Ventura, G 2013 'Childcare Subsidies and Household Labor Supply' Barcelona GSE Working Paper Series, vol. 738, Universitat Autonoma de Barcelona, Barcelona.

Childcare Subsidies and Household Labor Supply. / Guner, Nezih; Kaygusuz, Remzi; Ventura, Gustavo.

Barcelona : Universitat Autonoma de Barcelona, 2013. (Barcelona GSE Working Paper Series; Vol. 738).

Research output: Working paperOther research output

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Guner N, Kaygusuz R, Ventura G. Childcare Subsidies and Household Labor Supply. Barcelona: Universitat Autonoma de Barcelona. 2013 Nov. (Barcelona GSE Working Paper Series).