14th journées Louis-André Gérard-Varet

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Labour Supply and Childcare for Two-Parent Families: A Structural Approach
Karen Mumford, Antonia Parera-Nicolau, Yolanda Pena-Boquete

Last modified: 2015-05-11

Abstract


We develop and estimate a structural model of labour supply for two parent families. taking explicit account of the importance of childcare related vaiables. We find working hours substitution occurs with increases in the wge of either parent in the household and the own wage elasticity measures are very similar for mothers and fathers. However we find that the mother's working hour response to an increase in the father's wage is sensitive to the minimum childcare assumption. Our results suggest that lowering the cost of formal childcae in Australia will increase the working hours of parents, especially women, but enabling men and women to share in childcare repsonsibilites will magnify the labour supply response of mothers to their own wage rises considerably. We would expect family friendly legislation could lead to considerable gains in the participation of mothers in the labour market with little decline in the working hours of fathers.


Keywords


labour supply, gender, childcare