Life-cycle and intergenerational effects of child care reforms

Chan, MK; Liu, K

Life-cycle and intergenerational effects of child care reforms

Chan, MK

Liu, K

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Publication Type:: Journal Article
Citation:: Quantitative Economics, 2018, 9 (2), pp. 659 - 706
Issue Date:: 2018-07-01

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Field	Value	Language
dc.contributor.author	Chan, MK https://orcid.org/0000-0002-1010-7587	en_US
dc.contributor.author	Liu, K	en_US
dc.date.issued	2018-07-01	en_US
dc.identifier.citation	Quantitative Economics, 2018, 9 (2), pp. 659 - 706	en_US
dc.identifier.issn	1759-7323	en_US
dc.identifier.uri	http://hdl.handle.net/10453/130359
dc.description.abstract	Copyright © 2018 The Authors. We investigate the importance of various mechanisms by which child care policies can affect life-cycle patterns of employment and fertility among women, as well as long-run cognitive outcomes among children. A dynamic structural model of employment, fertility, and child care use is estimated using Norwegian administrative data. The estimation exploits a large-scale child care reform, which provided generous cash transfers to mothers who did not use formal child care facilities. We find that the reform generates sizable changes in employment and fertility decisions, especially among low-education women. We then use the mothers' unobserved heterogeneity in the structural model as a control function to examine the effects of mothers' behavior on long-run cognitive outcomes of children. The reform leads to lower reading scores among children, primarily as a result of mothers shifting to inferior forms of care. In counterfactual simulations, we compare the effects of an alternative child care subsidy, an expanded maternity leave program, and a tax deduction for mothers with children.	en_US
dc.relation.ispartof	Quantitative Economics	en_US
dc.relation.isbasedon	10.3982/QE617	en_US
dc.title	Life-cycle and intergenerational effects of child care reforms	en_US
dc.type	Journal Article
utslib.citation.volume	2	en_US
utslib.citation.volume	9	en_US
utslib.for	1403 Econometrics	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Faculty of Business/Economics Discipline
utslib.copyright.status	open_access
pubs.issue	2	en_US
pubs.publication-status	Published	en_US
pubs.volume	9	en_US

Abstract:

Copyright © 2018 The Authors. We investigate the importance of various mechanisms by which child care policies can affect life-cycle patterns of employment and fertility among women, as well as long-run cognitive outcomes among children. A dynamic structural model of employment, fertility, and child care use is estimated using Norwegian administrative data. The estimation exploits a large-scale child care reform, which provided generous cash transfers to mothers who did not use formal child care facilities. We find that the reform generates sizable changes in employment and fertility decisions, especially among low-education women. We then use the mothers' unobserved heterogeneity in the structural model as a control function to examine the effects of mothers' behavior on long-run cognitive outcomes of children. The reform leads to lower reading scores among children, primarily as a result of mothers shifting to inferior forms of care. In counterfactual simulations, we compare the effects of an alternative child care subsidy, an expanded maternity leave program, and a tax deduction for mothers with children.

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http://hdl.handle.net/10453/130359