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Title: Tax Credits, Labor Supply and Child Care
Resulting in 1 citation.
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Averett, Susan L. Peters, H. Elizabeth Waldman, Donald M. |
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Tax Credits, Labor Supply and Child Care Report No 92-9. Chicago IL: Population Research Center, NORC-University of Chicago, November 1992 Cohort(s): NLSY79 Publisher: National Opinion Research Center - NORC Keyword(s): Child Care; Children; Labor Force Participation; Maternal Employment; Taxes; Women This paper is a theoretical and empirical exploration of the effects of the child care tax credit in the U.S. income tax system on female labor supply and choice of child care arrangements. The tax credit provides a subsidy to working families towards the purchase of child care. This subsidy creates a nonlinear budget set similar to that created by a progressive income tax. Data from the 1986 interview of the youth cohort of the NLS are utilized to estimate the labor supply function of women with young children. Our estimates control for the type of child care arrangements made, explicitly allowing women to use market care or informal care. Our empirical work demonstrates that married women's labor supply is elastic with respect to the wage net of child care costs and the child care tax credit. Furthermore, we find that increasing the value (percent of expenditures subsidized) of the child care tax credit will increase hours supplied to the labor market by married women with children under age six. |
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Bibliography Citation
Averett, Susan L., H. Elizabeth Peters and Donald M. Waldman. Tax Credits, Labor Supply and Child Care. Report No 92-9. Chicago IL: Population Research Center, NORC-University of Chicago, November 1992. |