Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/101897
Authors: 
Guner, Nezih
Kaygusuz, Remzi
Ventura, Gustavo
Year of Publication: 
2014
Series/Report no.: 
IZA Discussion Papers 8303
Abstract: 
What would be the aggregate effects of adopting a more generous and universal childcare subsidy program in the U.S.? We answer this question in a life-cycle equilibrium model with joint labor-supply decisions of married households along extensive and intensive margins, heterogeneity in terms of the presence of children across households and skill losses of females associated to non-participation. We find that subsidies have substantial effects on female labor supply, which are largest at the bottom of the skill distribution. Fully subsidized childcare available to all households leads to long-run increases in the participation of married females and total hours worked by about 10.1% and 1.0%, respectively. There are large differences across households in welfare gains, as a small number of households – poorer households with children – gain significantly while others lose. Welfare gains of newborn households amount to 1.9%. Our findings are robust to differences among households in fertility and childcare expenditures.
Subjects: 
childcare
household labor supply
JEL: 
E62
H24
H31
Document Type: 
Working Paper

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