Abstract.
From 1999, all parents in Norway with children aged one to three, who did not attend publicly subsidised daycare, became eligible for a cash-for-care (CFC) subsidy. One effect of the CFC-subsidy was to increase in the relative price of external child care. This article analyses whether the CFC-subsidy has led to a reduction in the labour supply of mothers. A framework for evaluating policy reforms when reforms are equally and nation-wide accessible is put forward. The results show that the CFC-subsidy has reduced women’s labour supply. The results are sustained after controlling for contemporaneous macroeconomic shocks, using a triple difference approach.
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The author thanks Hege Torp, Erling Barth and Harald Dale-Olsen at The Institute for Social Research, as well as participants at the European Society for Population Economics (ESPE) conference in Bilbao in June 2002, participants at the Lunch-seminar at Statistics Norway, and two anonymous referees for valuable comments. The work is financed by the Norwegian Research Council, grant #137230/530. The financial support is gratefully acknowledged.
Responsible editor: Deborah Cobb-Clark.
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Schøne, P. Labour supply effects of a cash-for-care subsidy. J Popul Econ 17, 703–727 (2004). https://doi.org/10.1007/s00148-003-0176-8
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DOI: https://doi.org/10.1007/s00148-003-0176-8