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- Title
To Work or Not to Work? The Effect of Childcare Subsidies on the Labour Supply of Parents.
- Authors
Kosonen, Tuomas
- Abstract
This paper studies the effect of childcare subsidies on parental labour supply. I use variation arising from changes in the municipality-specific supplement to Finnish child homecare allowance to identify the causal effect of subsidies on the labour force participation of parents. The variation in labour supply incentives is plausibly exogenous, since eligibility depends on municipal-level rules, but not on family income. Robustness checks indicate that the results are not driven by policy endogeneity or residential sorting. I find a robust result that 100 euros higher supplement per month reduces the maternal labour supply by 3 percentage points.
- Subjects
SUBSIDIES; PARENTS; LABOR supply; INCOME; LABOR market research; EMPLOYMENT
- Publication
B.E. Journal of Economic Analysis & Policy, 2014, Vol 14, Issue 3, p817
- ISSN
2194-6108
- Publication type
Article
- DOI
10.1515/bejeap-2013-0073