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Nonmarket household time and the cost of children

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  • Koulovatianos, Christos
  • Schröder, Carsten
  • Schmidt, Ulrich
Abstract
Raising children demands a considerable amount of parental time, obliging working parents either to reduce their leisure time further or to buy childcare services in the market. Parents may face additional opportunity costs upon deciding to participate in the labor market, but these are difficult to measure. Using a survey instrument in Belgium and Germany, we estimate the income compensation needed to maintain family well-being when adults work versus when they do not enter the labor market. In both countries we find that full-time working parents face extra child costs and require higher labor market participation compensation compared with childless adults.

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  • Koulovatianos, Christos & Schröder, Carsten & Schmidt, Ulrich, 2009. "Nonmarket household time and the cost of children," Open Access Publications from Kiel Institute for the World Economy 28906, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkie:28906
    DOI: 10.1198/jbes.2009.0004
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    Cited by:

    1. Tess Penne & Tine Hufkens & Tim Goedeme & Berenice M L Storms, 2018. "To what extent do welfare states compensate for the cost of children? A hypothetical household approach to policy evaluations," JRC Working Papers on Taxation & Structural Reforms 2018-08, Joint Research Centre.
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    3. Krishna Pendakur, 2018. "Welfare analysis when people are different," Canadian Journal of Economics, Canadian Economics Association, vol. 51(2), pages 321-360, May.
    4. Christos Koulovatianos & Carsten Schröder & Ulrich Schmidt, 2010. "Confronting the Representative Consumer with Household-Size Heterogeneity," Discussion Papers of DIW Berlin 1056, DIW Berlin, German Institute for Economic Research.
    5. Melanie Borah & Andreas Knabe & Kevin Pahlke, 2021. "Parental time restrictions and the cost of children: insights from a survey among mothers," The Journal of Economic Inequality, Springer;Society for the Study of Economic Inequality, vol. 19(1), pages 73-95, March.
    6. Rehdanz, Katrin & Schröder, Carsten & Narita, Daiju & Okubo, Toshihiro, 2017. "Public preferences for alternative electricity mixes in post-Fukushima Japan," Energy Economics, Elsevier, vol. 65(C), pages 262-270.
    7. Schröder, Carsten & Bönke, Timm, 2012. "Country inequality rankings and conversion schemes," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-43.
    8. Bönke Timm & Schröder Carsten, 2011. "Poverty in Germany – Statistical Inference and Decomposition," Journal of Economics and Statistics (Jahrbuecher fuer Nationaloekonomie und Statistik), De Gruyter, vol. 231(2), pages 178-209, April.
    9. Christos Koulovatianos & Ulrich Schmidt & Carsten Schröder, 2008. "Arbeitslosengeld II: Arbeitsanreize und Verteilungsgerechtigkeit," Wirtschaftsdienst, Springer;ZBW - Leibniz Information Centre for Economics, vol. 88(7), pages 461-466, July.
    10. Merk, Christine & Rehdanz, Katrin & Schröder, Carsten, 2019. "How consumers trade off supply security and green electricity: Evidence from Germany and Great Britain," Energy Economics, Elsevier, vol. 84(S1).
    11. Melanie Borah, 2020. "Estimating Extended Income Equivalence Scales from Income Satisfaction and Time Use Data," Social Indicators Research: An International and Interdisciplinary Journal for Quality-of-Life Measurement, Springer, vol. 149(2), pages 687-718, June.
    12. Emmanuel Ekow Asmah & Francis Kwaw Andoh & Naa Adjeley Suta Alakija Sekyi & Peter Yeltulme Mwinlaaru & Chei Bukari, 2023. "Examining Parental Expenditure on Children in Ghana," Journal of Family and Economic Issues, Springer, vol. 44(4), pages 777-789, December.
    13. Bönke, Timm & Eichfelder, Sebastian & Utz, Stephen, 2012. "Uneven treatment of family life? Horizontal equity in the U.S. tax and transfer system," Discussion Papers 2012/18, Free University Berlin, School of Business & Economics.
    14. Koulovatianos, Christos & Schröder, Carsten & Schmidt, Ulrich, 2014. "Do demographics prevent consumer aggregates from reflecting micro-level preferences?," CFS Working Paper Series 484, Center for Financial Studies (CFS).
    15. Koulovatianos, Christos & Schröder, Carsten & Schmidt, Ulrich, 2019. "Do demographics prevent consumption aggregates from reflecting micro-level preferences?," European Economic Review, Elsevier, vol. 111(C), pages 166-190.

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    More about this item

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • I31 - Health, Education, and Welfare - - Welfare, Well-Being, and Poverty - - - General Welfare, Well-Being

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