An Up-to-Date Joint Labor Supply and Child Care Choice Model

42 Pages Posted: 22 Sep 2017

See all articles by Thor O. Thoresen

Thor O. Thoresen

Statistics Norway - Research Department; CESifo (Center for Economic Studies and Ifo Institute)

Trine Vatto

Statistics Norway

Date Written: September 11, 2017

Abstract

Norwegian parents of preschool children make their care choices from a completely different choice set compared to what their predecessor did, say, two decades ago. Now, there is essentially only one type of nonparental care, center-based care, and at the parental side fathers take a more pivotal role in the early childhood care. In the present paper we develop a joint labor supply and child care choice model that accounts for these new characteristics of the family choice set – only one nonparental care option and both mothers and fathers contributing to the production of nonparental care. Even though Norway may be seen as a frontrunner in terms of both publicly subsidized care and gender equality, we believe that the model points to current and future modeling directions for several other economies too. The model is estimated on data on working hours and families’ use of child care. We find that parents are not responsive to the price on center-based care, but respond more strongly to changes in wages. The average wage elasticity for mothers is in the range 0.25–0.30.

Keywords: Family Policy, Child Care, Structural Labor Supply Model

JEL Classification: J130, J220, C250

Suggested Citation

Thoresen, Thor O. and Vatto, Trine, An Up-to-Date Joint Labor Supply and Child Care Choice Model (September 11, 2017). CESifo Working Paper Series No. 6641, Available at SSRN: https://ssrn.com/abstract=3040491 or http://dx.doi.org/10.2139/ssrn.3040491

Thor O. Thoresen (Contact Author)

Statistics Norway - Research Department ( email )

Kongens Gt. 6
PO Box 8131 Dep
N-0033 Oslo
Norway

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Trine Vatto

Statistics Norway ( email )

N-0033 Oslo
Norway

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