Arbeitspapier

Distributional and Behavioural Effects of Child Care Subsidies

A methodology to describe the distributional and behavioural effects of child care subsidies is presented within a micro simulation framework. We discuss the effects of changing the governmental policy to support families with preschool children, from today's subsidisation of spaces at child care centres to an equal cash transfer to all families with preschoolers. In the decision model applied (Michalopoulos et al. 1992) the mother chooses consumption, market time and average quality of child care. The model is adjusted to the Norwegian child care market and data for mothers who both are employed and receiving child care subsidies (1990) are used, since this group of mothers is assumed to respond most to the reform. Weaknesses in data and simplifying model assumptions imply that the results must be used with caution. Results from our simulation experiment do not indicate any large decrease in mothers labour supply, when altering the transfer system. The reform will give a substantial decrease in inequality among households with preschoolers, since the child care subsidies very much favour well-off households.

Language
Englisch

Bibliographic citation
Series: Discussion Papers ; No. 135

Classification
Wirtschaft
Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
Personal Income, Wealth, and Their Distributions
Equity, Justice, Inequality, and Other Normative Criteria and Measurement
Taxation and Subsidies: Externalities; Redistributive Effects; Environmental Taxes and Subsidies
Fertility; Family Planning; Child Care; Children; Youth
Time Allocation and Labor Supply
Subject
Child care
distribution
household behaviour
inequality
labour supply
micro simulation
subsidies.

Event
Geistige Schöpfung
(who)
Thoresen, Thor Olav
Event
Veröffentlichung
(who)
Statistics Norway, Research Department
(where)
Oslo
(when)
1995

Handle
Last update
10.03.2025, 11:41 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Thoresen, Thor Olav
  • Statistics Norway, Research Department

Time of origin

  • 1995

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