Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/192119 
Year of Publication: 
1995
Series/Report no.: 
Discussion Papers No. 135
Publisher: 
Statistics Norway, Research Department, Oslo
Abstract: 
A methodology to describe the distributional and behavioural effects of child care subsidies is presented within a micro simulation framework. We discuss the effects of changing the governmental policy to support families with preschool children, from today's subsidisation of spaces at child care centres to an equal cash transfer to all families with preschoolers. In the decision model applied (Michalopoulos et al. 1992) the mother chooses consumption, market time and average quality of child care. The model is adjusted to the Norwegian child care market and data for mothers who both are employed and receiving child care subsidies (1990) are used, since this group of mothers is assumed to respond most to the reform. Weaknesses in data and simplifying model assumptions imply that the results must be used with caution. Results from our simulation experiment do not indicate any large decrease in mothers labour supply, when altering the transfer system. The reform will give a substantial decrease in inequality among households with preschoolers, since the child care subsidies very much favour well-off households.
Subjects: 
Child care
distribution
household behaviour
inequality
labour supply
micro simulation
subsidies.
JEL: 
C81
D31
D63
H23
J13
J22
Document Type: 
Working Paper
Document Version: 
Digitized Version

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