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http://hdl.handle.net/10419/56128
  

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dc.contributor.authorDomeij, Daviden_US
dc.contributor.authorKlein, Paulen_US
dc.date.accessioned2012-02-14en_US
dc.date.accessioned2012-03-28T13:04:05Z-
dc.date.available2012-03-28T13:04:05Z-
dc.date.issued2010en_US
dc.identifier.urihttp://hdl.handle.net/10419/56128-
dc.description.abstractIn an economy with distortionary taxes on labor, can subsidies on day care, financed by an increase in taxes, raise welfare by encouraging women with small children to work? We show, within a heterogeneous-agent life-cycle framework, that the Ramsey optimal policy consists in equalizing consumption/leisure wedges over the life cycle and across agents. A simple way to implement this is to make day care expenses tax deductible. Calibrating our model to Germany, we find that tax deductibility for day care expenses leads to an approximate doubling of labor supply for both married and single mothers with small children. The overall welfare gain from optimal reform corresponds to a 1.0 percent increase in consumption.en_US
dc.language.isoengen_US
dc.publisherEkonomiska Forskningsinst. Stockholmen_US
dc.relation.ispartofseriesSSE/EFI Working Paper Series in Economics and Finance 729en_US
dc.subject.jelE13en_US
dc.subject.jelJ13en_US
dc.subject.ddc330en_US
dc.subject.keywordFemale labor force participationen_US
dc.subject.keywordGermanyen_US
dc.subject.keywordday care subsidiesen_US
dc.subject.stwWeibliche Arbeitskräfteen_US
dc.subject.stwFamilienleistungsausgleichen_US
dc.subject.stwWohlfahrtseffekten_US
dc.subject.stwLebenszyklusen_US
dc.subject.stwDeutschlanden_US
dc.titleShould day care be subsidized?en_US
dc.typeWorking Paperen_US
dc.identifier.ppn629820163en_US
dc.rightshttp://www.econstor.eu/dspace/Nutzungsbedingungenen_US
Appears in Collections:SSE/EFI Working Paper Series in Economics and Finance, EFI - The Economic Research Institute, Stockholm School of Economics

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