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Child-care costs and mothers’ employment rates: an empirical analysis for Austria
The availability of affordable formal child care is an important determinant of the labour force participation of parents,
particularly of mothers, which is increasingly discussed. This paper examines the impact of child-care costs on the employment
rates of mothers with children younger than 12 years. Using data from the 1995 and 2002 Austrian Microcensus, combined with
administrative wage data from Austrian tax records, we estimate the impact of net wages and child-care costs on mothers’ employment
probabilities. In line with theoretical considerations and most of the empirical literature, we find a negative elasticity
of mothers’ employment rates to child-care costs as well as positive elasticity with regard to net wages. The point estimates
for the impact of net wages and child-care costs are of similar absolute size. Additionally, the empirical results indicate
that higher family income reduces the employment probability of mothers.
Keywords:Child-care, Labour supply, Bivariate sample selection, Matched survey and administrative data
Forschungsbereich:Arbeitsmarktökonomie, Einkommen und soziale Sicherheit
Sprache:Englisch