Scandinavian Working Papers in Economics

Working Papers,
Lund University, Department of Economics

No 2009:15: The Cost of Children: Differences between the Genders

Jonas Nordström ()
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Jonas Nordström: Department of Economics, Lund University, Postal: Department of Economics, School of Economics and Management, Lund University, Box 7082, S-220 07 Lund, Sweden

Abstract: In this paper we estimate the opportunity cost of children. The underlying theoretical model is represented by a household production model. In the empirical analysis, we consider three different cohorts for men and women born between 1955 and 1970. For the women in the two oldest cohorts, the opportunity cost of two children is estimated to 28-29 per cent of full income, which in monetary terms is close to the estimated income difference between women employed in the public and private sector. The opportunity cost of fatherhood is generally positive, but only significantly positive for men born between 1960 and 1965.

Keywords: Children; parenthood; opportunity cost; income loss

JEL-codes: D13; J13

35 pages, October 16, 2009

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