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Child Care Costs and Mothers' Labor Supply: An Empirical Analysis for Germany

Author

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  • Katharina Wrohlich
Abstract
This study analyzes the effect of child care costs on the labor supply of mothers with preschool children in Germany using data from the German Socio-Economic Panel (2002). Child care costs are estimated on the basis of a sample selection model. A structural household utility model, which is embedded in a detailed tax-benefit model, is used for labor supply estimation. In contrast to a previous German study, I find significant effects of child care costs on mother's labor supply. Compared to other countries such as the US, Canada or the UK, the effects are rather small, which can be explained by the fact that child care costs are already heavily subsidized in Germany.

Suggested Citation

  • Katharina Wrohlich, 2004. "Child Care Costs and Mothers' Labor Supply: An Empirical Analysis for Germany," Discussion Papers of DIW Berlin 412, DIW Berlin, German Institute for Economic Research.
    • Handle: RePEc:diw:diwwpp:dp412
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    References listed on IDEAS

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    1. Patricia M. Anderson & Philip B. Levine, 1999. "Child Care and Mothers' Employment Decisions," NBER Working Papers 7058, National Bureau of Economic Research, Inc.
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    More about this item

    Keywords

    Child care costs; Labor supply estimation;

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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