The labor supply effects of child care costs and wages in the presence of subsidies and the earned income tax credit

This paper uses CPS and SIPP data between 1990 and 2004 to examine the effects of child care expenditures and wages on the employment of single mothers. It adds to the literature in this area by incorporating explicit controls for child care subsidies and the EITC into the estimation. Doing so provides an opportunity to examine mothers’ sensitivity to prices and wages net of policies that influence these amounts. Results suggest that lower child care expenditures, higher wages, and more generous subsidy and EITC benefits increase the likelihood of employment. Allowing the impact of child care subsidies and the EITC to vary with expenditures and wages reveals substantial heterogeneity. In particular, the largest labor supply effects of child care subsidies are generated for mothers with higher child care costs, while the largest labor supply effects of the EITC are found for mothers with lower wages.     

Does child care availability play a role in maternal employment and children’s development? Evidence from Italy

This paper investigates the effects of public child care availability in Italy in mothers’ working status and children’s scholastic achievements. We use a newly available dataset containing individual standardized test scores of pupils attending the second grade of primary school in 2009–2010 in conjunction with data on public child care availability. Our estimates indicate a positive and significant effects of child care availability on both mothers’ working status and children’s Language test scores. We find that a percentage change in public child care coverage increases mothers’ probability to work by 1.3 percentage points and children’s Language test scores by 0.85 percent of one standard deviation; we do not find any effect on Math test scores. Moreover, the impact of a percentage change in public child care on mothers’ employment and children’s Language test scores is greater in provinces where child care availability is more limited.     

The Impact of Child Behaviour Problems on Maternal Employment: A Longitudinal Cohort Study

This prospective population-based study examined associations between children’s behaviour problems and maternal employment. Information on children’s behaviour problems at 3 years from 22,115 mothers employed before pregnancy and participating in the Norwegian Mother and Child Cohort Study were linked to national register data on employment and relevant social background factors, mothers’ self-reported susceptibility to anxiety/depression and mother-reports of day-care attendance and fathers’ income. Mothers reporting their child to have severe (>2 SD) internalizing or severe combined behaviour problems (5 %) had excess risk of leaving paid employment irrespective of other important characteristics generally associated with maternal employment (RR 1.24–1.31). The attributable risk percent ranged from 30.3 % (internalizing problems) to 32.4 % (combined problems). Externalizing behaviour problems were not uniquely associated with mothers leaving employment.     

Child Care Choices in Spain

In this paper we examined the determinants of child care choices among families with young children in Spain, by means of a conceptual framework that encompassed need, costs, and availability. Based on data from the Spanish Time Use Survey and Household Budget Survey, our study indicated that, regardless of model specification, the age of the child, the mother’s labor force decisions, and the prices of child care services available were the most important factors that mothers considered when they chose a type of child care. Day care center services substituted for babysitters when the price of babysitters rose; and relative and parent care substituted for day care centers when these services became more expensive. We found no different sensitivity to price changes for working and non-working mothers. From a public policy perspective, child care price subsidies were found to have much stronger effects on child care decisions than child allowances or public provision of school slots.     

Gender Bias in Parental Leave: Evidence from Sweden

This paper estimates the effect of child gender on mothers’ and fathers’ parental leave using population-wide register data from Statistics Sweden and the Swedish Social Insurance Agency. The results showed that a first-born son increased fathers’ parental leave with 0.6 days (1.5 %) and decreased mothers’ leave by a similar amount. Both the sign and size of this effect is in line with previous research, showing that these types of biases exist also in a society with top ratings on gender equality. However, non-traditional families, with high maternal relative earnings and/or educational levels, showed even larger gender biases which suggest that it may be mothers, rather than fathers, that are the driving force behind this child gender bias.     

Child welfare supervised children's participation in center-based early care and education

Research suggests that early care and education (ECE) services, particularly center-based ECE, may help prevent child maltreatment and also mitigate some of the negative developmental outcomes associated with child maltreatment. There is also preliminary evidence to suggest that ECE could reduce the likelihood that maltreatment allegations will be substantiated by child welfare authorities and/or result in children being placed in out-of-home care. However, little is known about rates of ECE participation among children receiving child welfare services, nor the factors that determine ECE participation for this population. Data from the first wave of the National Survey of Child and Adolescent Wellbeing II, a nationally representative sample of children referred to the United States (U.S.) child welfare system (CWS) for suspected maltreatment, were used to measure the frequency with which 0–5 year olds participate in center-based ECE. Additionally, logistic regression analyses explored the effects of maltreatment type, substantiation, and children's living arrangements (i.e., with parents, relatives, or foster parents) on this outcome, controlling for a range of child and family covariates associated with ECE participation in the general population. Results indicate that less than a third of 0–5 year olds receiving child welfare services in the U.S. are participating in center-based ECE. Among the various categories of maltreatment type measured, being reported to the CWS for suspected physical abuse was associated with decreased odds of center-based ECE participation; however, other types of maltreatment, substantiation, and living arrangement were unrelated to center-based ECE participation. These findings suggest that, despite recent efforts by the U.S. federal government to promote ECE participation for CWS-supervised children, the vast majority of young children in the U.S. CWS are not receiving center-based ECE, and physically abused children are particularly disadvantaged when it comes to accessing these services.     

Familienpolitik, Bildung und Berufskarrieren von M��ttern in Deutschland, USA und Schweden

This article compares the duration of and consequences for employment interruptions for mothers with distinct educational qualifications in cross-national perspective. We analyze the duration of mothers?? employment interruption and the relative quality of the job after childbirth, for high and low qualified mothers in Germany, Sweden, and the United States. Analyses are based on harmonized national longitudinal data sets (GLHS-West, NLSY, LNU), which allow us to study mothers?? careers over the past 30?C35 years. We apply event-history analysis to study how long mothers with distinct educational levels interrupt employment after childbirth, and how the patterns of return to work differ with respect to mothers?? educational level. In all three countries the highly educated display a greater labor market attachment. In the US, almost half of the mothers with some college background, compared to only a quarter of high-school dropouts stay employed continuously after childbirth. In Sweden, basically all mothers take time-out for at least half a year. In Germany, 25% of mothers with university entrance qualification do not claim parental leave. In Germany and Sweden consequences of leave extensions seem to operate independent of mothers?? educational levels. In the U.S. medium and highly educated mothers tend to return more slowly after the enactment of the FMLA.     

The effect of child support on the labor supply of custodial mothers participating in TANF

Child support is a critical source of income, especially for the growing proportion of children born to unmarried mothers. Current social policy supports custodial parent employment (e.g., the Earned Income Tax Credit [EITC] and other work supports have largely taken the place of an entitlement to cash assistance for single mothers of young children). Given many single mothers' limited earnings potential, child support from noncustodial fathers is also important. This raises questions about the effects of child support on custodial mothers' labor supply, and whether policies that increase child support receipt will thereby discourage mothers' employment. This paper addresses these questions, taking advantage of data from a statewide randomized experiment conducted in Wisconsin. Unlike previous nonexperimental research, we do not find any negative effect of child support on the likelihood to work for pay or the number of hours worked in a given week. Recent U.S. social welfare policies have focused on increasing both custodial mothers' child support collections and their labor supply. The results suggest that these may be compatible policies; the absence of a negative labor supply effect strengthens the potential antipoverty effectiveness of child support.     

Tax incentives and family labor supply in Austria

The family policy reform 2009 introduced tax deductibles for children and child care expenditures in Austria. In this paper we evaluate this reform based on a structural labor supply model with unitary households which has been estimated on the European Statistics on Income and Living Conditions cross-sections 2004–2008. We find that the reform had only small employment effects, most of them being generated through the introduction of a child care deductible. However, to illustrate the employment potential of a shift from universal child transfers to tax deductibles we propose additional simulations showing that such a policy shift would yield an increase in full time equivalents of approximately .70 % of overall employment, with married females increasing their labor supply by up to 1.5 %. While the proposed policy shifts have regressive effects in terms of their distributional impact, we show that phasing-out the tax deductible at higher income allows for the compensation of lower-income households without jeopardizing positive employment effects.     

Mothers’ Parenting Stress and Engagement: Mediating Role of Parental Competence

ABSTRACT

Guided by role-strain theory and the spillover hypothesis, this study used data (n = 2,637) from the Fragile Families and Child Wellbeing Study to examine the link between mothers’ parenting stress, perceived parental competence, and parental engagement when the child was age 1, 3, and 5, respectively. Analyses were based on a multiple-sample path analysis that tested direct and indirect effects for mothers of biologically intact and nonintact families. Mothers who reported higher levels of parenting stress at child age 1 experienced lower levels of perceived parental competence at child age 3. Higher levels of perceived parental competence at child age 3 predicted increased mother–child engagement levels at child age 5. Test of indirect effects confirmed that perceived parental competence mediated the relationship between parenting stress and parental engagement for mothers of intact and nonintact families. Implications are discussed.     

The role of the health care sector in the U.S. economy

This Issue Brief discusses factors that contribute to the growth of health care expenditures and the reasons that many individuals, employers, and policymakers consider health expenditures too high. In addition, it describes various industries that make up the health care delivery system and their role in the U.S. economy as employers, producers, exporters, and suppliers of research and development. The report also discusses the economic implications of rising health care expenditures for individuals, employers, and the federal government and the potential impact of proposed health care reform on the health care sector and the U.S. economy as a whole. Health care delivery industries such as pharmaceuticals and medical equipment suppliers have higher than average research and development levels, in addition to a positive balance of trade. Moreover, while the total number of jobs in the private sector declined between 1990 and 1993, the number of jobs in the relatively high paid health services sector continued to grow. In aggregate, employer spending on health care represents only 6.6 percent of total labor costs. In comparison, wages and salaries represent 83 percent of total labor costs. Consequently, the growth rate of health care expenditures has a smaller impact on the growth rate of total compensation than does the growth rate in wages and salaries. Using job multipliers developed by the U.S. Department of Commerce, it is estimated that the 18,600 health care services jobs in Rochester, Minnesota in 1993 created another 32,000 jobs in the area. Any contraction of the health care sector in cities that have a large concentration of employment in health services would result in reduced employment in restaurants, retail stores, janitorial services, and other local businesses. EBRI's simulations estimated that between 200,000 and 1.2 million workers could become unemployed as a direct result of a mandate that employers provide health benefits to their employees, assuming that wages and salaries did not adjust at all. Others find that approximately 50,000 individuals would lost their jobs, assuming that wages and other labor costs adjust downward to completely account for increased costs. As is apparent, the estimates of job loss (and of the total costs of the policy) are extremely sensitive to the assumptions used in the simulation.     

Maternal child care preferences for infants,toddlers, and preschoolers: the disconnect between policy and preference in the USA

While much research exists looking at parental preferences for child care, much of that research uses child care choice as a proxy for preference. In an effort to examine the types of care mothers prefer if no constraints were placed on their decision, this quantitative study investigated how family demographic factors and family role ideology relate to the types of child care (parental and non-parental forms) mothers prefer ‘in an ideal world’ using a sample of 345 employed mothers of children under 6 years of age in a suburb of a large metropolitan area in the southern USA. Participants completed a questionnaire examining the types of care they viewed as ideal for infants (0–12 months old), toddlers (13–30 months old), and preschoolers (31–72 months old) if no constraints were placed on the decision. Results indicated that the preferences for type of care for mothers in this sample varied according to the child's age, with a large majority of mothers preferring parental care for their children. Ideological and demographic factors predicting preferences for first and second choice of child care were also explored through binary and multinomial logistic regression, revealing the influence of ethnicity, education, and family role ideology to preferences for infant care. These results add to the existing literature by confirming previous findings about the influence of child age to child care preferences, as well as highlighting the disconnect between these preferences and the way family policies are structured in the USA.     

For love or money: Costs of child care by relatives

A substantial proportion of employed mothers of young children, especially low-income mothers, use relatives to provide child care. This study uses data on interhousehold exchange of gifts, loans, and household services from the National Survey of Families and Households to examine monetary and nonmonetary costs of child care by relatives. Results show that mothers who use relatives for child care are more likely to give services and to have given gifts or loans to other relatives living outside the household than mothers using other forms of child care or mothers who are not employed. Monetary payments for child care by relatives are made more often for full-time than part-time care and less often to grandparents than to other relatives providing care. Implications for government child care assistance programs are discussed. Preparation of this paper was supported in part by the Illinois Agricultural Experiment Station. The author acknowledges the helpful comments of Marianne Ferber, Andrea Beller, and Sharon Y. Nickols. Her research interests include issues relating to women's employment, including child care and house-hold time allocation. She received her Ph.D. in Family and Consumption Economics from the University of Illinois. Send all correspondence to author.     

The Effects of Children’s Health on Mothers’ Employment

When children have health problems, mothers face a tradeoff between the decision to work to satisfy increased expenses and the decision to stay home to fulfill enlarged caregiving needs, especially for children with chronic conditions. This research used an instrumental variables approach to investigate the labor market consequences of mothers due to burden to care children with health problems. We found mothers’ employment probability increased by 0.9% for every $100 of increased out-of-pocket medical spending, while employment probability fell by 1.0% for every half day of school/day care a sick child missed. By correcting for endogeneity we addressed a potential empirical bias. Analyses by subgroups showed that Hispanic mothers were less likely to work in the labor market with high caregiving burden. We also found that the effects of time burden on labor market outcomes were magnified for black mothers.     

Maternal employment and time investments in children

We use data from the Panel Study of Income Dynamics and the American Time Use Survey to estimate the effect of maternal employment on time spent with children. We find that each additional 10 h of maternal work reduces mother–child quality time interaction by about 7.5 % and time reading together by 8 %. This relationship between work and quality time does not vary much based on mothers’ education and is robust to the inclusion of family or child fixed effects. There is no evidence that fathers or other relatives fill the gap in time investments due to maternal employment.     

Predictors of early care and education type among preschool-aged children in immigrant families: The role of region of origin and characteristics of the immigrant experience

Children of immigrants have lower rates of participation in early care and education (ECE) settings in the year before they enter kindergarten than do children of native parents. There is a dearth of research examining factors associated with the ECE type that immigrant families select for their children. Using data on immigrant families from the ECLS-B (N ≈ 2500) this study aims to fill gaps in the literature by examining associations between immigrant, family, child, and contextual characteristics and patterns of ECE type at age 4. The results show significant differences in ECE type related to parental region of origin that were reduced when characteristics of families and contexts were taken into account. Findings highlight the importance of considering factors that may be especially salient for immigrant families, including household English proficiency, parental citizenship status, parental preferences, and availability of non-English speaking care providers.     

Labor Market Penalties for Mothers in Italy

We use a large Italian employer-employee matched dataset to study how motherhood affects women’s working career in terms of labor force participation and wages. We confirm that the probability of exiting employment significantly increases for mothers of pre-school children; however, this is mitigated by higher job quality, human capital endowment and childcare accessibility. Most importantly, the availability of part-time jobs reduces their probability of moving out of the labor force. Women not leaving employment after becoming mothers experience lower wages than women with no pre-school child, and there are no signs of this gap closing 5 years after childbirth. Contrary to previous literature, the wage gap penalty emerges only among women working full-time, thanks to the high protection accorded to part-time jobs in Italy.     

Early care and education arrangements and young children's risk of foster placement: Findings from a National Child Welfare Sample

A primary goal of the U.S. child welfare system (CWS) is to maintain children investigated for maltreatment in their parents' homes whenever safely possible. This study explores the possibility that early care and education (ECE) services (e.g., child care, preschool, day care) can help the CWS achieve this goal by using a nationally representative sample of children referred to CWS for suspected maltreatment to measure the relationship between ECE receipt and the likelihood that 0–5 year olds in the CWS will be placed in foster care approximately 18 months later. Specifically, logistic regression analyses explore the relationship between: (1) regular ECE participation (yes/no), and (2) type of ECE arrangement (Head Start, other center- or home-based ECE, family/friend/relative ECE, other ECE, and multiple types of ECE) and foster placement risk. After controlling for multiple socio-demographic characteristics and foster placement risk factors, children who received ECE (yes/no) were no less likely to be placed in foster care than children who received no ECE. However, when exploring type of ECE arrangement, children who received Head Start were 93% less likely to be placed in foster care than children with no ECE. Children who participated in multiple types of ECE were almost seven times more likely to be placed in foster care than children with no ECE. These results suggest that Head Start may help maltreated children avoid foster placement and that experiencing multiple types of ECE is a risk factor for foster placement. It is recommended that caseworkers routinely assess the ECE service history and needs of families with young children who come in contact with the CWS, paying attention to the type and number of ECE services used.     

BUSINESS CYCLE FLUCTUATIONS WITH THE DIVISION OF PERMANENT AND TEMPORARY EMPLOYMENT

In the mainstream real business cycle (RBC) model, labor can be viewed as temporary employment since the firm's demand for labor behaves directly in response to stochastic productivity shocks in each period. This paper provides a tractable way of analyzing fluctuations in permanent and temporary employment over the business cycle, as well as the underlying driving forces. This inclusion of heterogeneity helps reconcile the RBC model with the U.S. data given that temporary employees in general only account for a small proportion of total private‐sector employment (about 2%–3%). We draw an explicit division between permanent and temporary employment and resort to this separation to account for stylized facts that characterize a two‐tier labor market. In particular, with regard to the U.S. labor market, our benchmark model can well explain the motivating facts: (1) temporary employment is much more volatile than permanent employment, (2) the share of temporary employment (the ratio of temporary to aggregate employment) exhibits strong pro‐cyclicality, (3) permanent employment lags by two quarters on average, and (4) the correlation between temporary employment and output is stronger than that involving the permanent counterpart. The quantitative analysis suggests that our proposed channels explain the main facts well and the model further provides plausible reasoning for a firm's labor hoarding. (JEL E24, E32)     

Maternal employment and food produced at home: evidence from Japanese data

This paper examines whether mothers’ labor supply discourages home production, focusing on food preparation at home in Japanese families. Although empirical studies on home production are usually conducted using time use data, we use data collected by scanners, which cover daily goods purchased by over 10,000 households over 3 years. Based on the composition of daily food expenditures for foods consumed, we measure how many products are made using time-consuming processes at home, and examine if time-consuming home production is discouraged by mothers’ employment away from home. Controlling for unobserved heterogeneity among households using the panel structure of our scanner data, we first show that mothers’ out-of-home employment has a negative effect on home cooking. This effect is shared across economic classes, particularly when mothers work part-time, as compared with non-working mothers. Second, we show that this negative effect is more apparent in the low economic class. Households in this class show a particular decrease in time-consuming home cooking, especially when the mothers work part-time. Third, the smaller negative effect among the higher class can be explained by stronger health-consciousness and aversion to less-healthy products in this class.