Arbeiten lohnt sich nicht - ein zweites Kind noch weniger

Monika Bütler ()

University of St. Gallen Department of Economics working paper series 2006 from Department of Economics, University of St. Gallen

Abstract: Child-care subsidies are meant to facilitate work for mothers with small children. The paper demonstrates that the predominant current subsidy scheme in Switzerland, which ties the subsidies to realized income (but not to potential income), creates strongly negative work incentives especially for well qualified women. With the example of the city of Zürich it is shown that it does not pay off for mothers to work more than one or two days per week, as any increase in the hours worked leads to a more than proportional rise in child-care costs. For more than one child, the effective total marginal tax rate, including child-care expenditures, can well exceed 100%. This effect is primarily due to the endogenous pricing of child-care facilities implied by the scheme, and much less to progressive taxation.

Keywords: Child Care Subsidies; Female Labour Supply; Fertility (search for similar items in EconPapers)
JEL-codes: D13 H31 H53 J22 (search for similar items in EconPapers)
Pages: 15 pages
Date: 2006-02
New Economics Papers: this item is included in nep-mac
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Persistent link: https://EconPapers.repec.org/RePEc:usg:dp2006:2006-05

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