Journal article

Labor supply heterogeneity and demand for child care of mothers with young children

Patricia Apps, Jan Kabatek, Ray Rees, Arthur van Soest



This paper presents a structural model of the labor supply and child care choices of partnered mothers with pre-school aged children. The father’s time-use decisions are taken as given. The main goal is to analyze the sensitivity of maternal time use to the price of child care, taxes, benefits and child care subsidies. To account for non-convexities in the budget sets, we specify a discrete choice model. We estimate the model on data on couples with young children from the HILDA survey representative of the Australian population, which contains detailed information on time use and bought-in child care. Simulations based on the estimated parameters show that the time decisions of mothers with..

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Awarded by Australian Research Council's Discovery Project funding scheme

Awarded by Australian Research Council

Funding Acknowledgements

This research was supported under the Australian Research Council's Discovery Project funding scheme (Project ID: DP1094021). The authors thank seminar participants at Universite Laval, University of Lausanne, University of Mannheim, Netherlands Bureau for Economic Policy Analysis (CPB), Tilburg University, the ESPE Annual Conference, the NATSEM International Child Care, Work, and Family Workshop, the Netspar Pension Day, and the Netspar International Workshop for their valuable comments.