Working Paper Series
Siv Gustafsson and Frank Stafford
Daycare Subsidies and Labor Supply in Sweden
Abstract: This paper utilizes data from a Swedish household survey
for 1984 (The HUS data) in combination with data on public daycare fees and
spaces per child by community. We argue that the subsidy rate and
availability of spaces determined by the political leaders of the community
is to a large extent exogenous to the household. The joint out-of-home
childcare and labor supply decision is analyzed by logit choice models. We
find that the high quality public daycare in Sweden encourages labor market
activity of women with preschoolers even when spouse's income is high and
that when spaces are not rationed a lower price encourages use.
Keywords: Childcare subsidies; labour supply; community provision of services; (follow links to similar papers)
JEL-Codes: H31; H53; J22; (follow links to similar papers)
41 pages, August 1989
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