Child-care costs and mothers’ employment rates: an empirical analysis for Austria

The availability of affordable formal child care is an important determinant of the labour force participation of parents, particularly of mothers, which is increasingly discussed. This paper examines the impact of child-care costs on the employment rates of mothers with children younger than 12 yea...

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Bibliographic Details
Published in:Review of economics of the household 2015-12, Vol.13 (4), p.837-870
Main Authors: Mahringer, Helmut, Zulehner, Christine
Format: Article
Language:English
Subjects:
Child care
Children & youth
Costs
Economic analysis
Economic models
Economic statistics
Economic theory
Economics
Economics and Finance
Elasticity
Employment
Estimates
Expenditures
Families & family life
Family income
Females
Government spending
Households
Labor Economics
Labor force
Labor supply
Microeconomics
Mothers
Population Economics
Reconciliation
Social Sciences
Socioeconomic factors
Studies
Wages & salaries
Working mothers
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Summary:The availability of affordable formal child care is an important determinant of the labour force participation of parents, particularly of mothers, which is increasingly discussed. This paper examines the impact of child-care costs on the employment rates of mothers with children younger than 12 years. Using data from the 1995 and 2002 Austrian Microcensus, combined with administrative wage data from Austrian tax records, we estimate the impact of net wages and child-care costs on mothers’ employment probabilities. In line with theoretical considerations and most of the empirical literature, we find a negative elasticity of mothers’ employment rates to child-care costs as well as positive elasticity with regard to net wages. The point estimates for the impact of net wages and child-care costs are of similar absolute size. Additionally, the empirical results indicate that higher family income reduces the employment probability of mothers.
ISSN:1569-5239
1573-7152
DOI:10.1007/s11150-013-9222-9