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Title: Tax Credits, Labor Supply and Child Care: Theory and Measurement
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: Theory and Measurement Presented: Denver, CO, Population Association of America Meetings, April 1992 Cohort(s): NLSY79 Publisher: Population Association of America Keyword(s): Behavior; Child Care; Children; Labor Force Participation; Labor Supply; Taxes; Women Permission to reprint the abstract has not been received from the publisher. While the increase in labor supply of mothers with young children since World War II is a well known phenomena, little is understood about the role child care costs play in this increase. This paper is a theoretical and empirical exploration of the effects of the child care tax credit inherent in the U.S. income tax system on female labor supply and choice of child care arrangements. This tax credit provides a subsidy to working families towards both the quantity and quality of child care purchased. This subsidy creates a nonlinear budget set similar to that of a progressive income tax. Data from the NLSY are utilized to estimate the labor supply function of women with young children. The estimates control for the type of child care arrangements made, explicitly allowing women to use market care and informal care. These results give an estimate of the behavioral impacts of subsidizing child care and should be of interest to policy makers. |
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Bibliography Citation
Averett, Susan L., H. Elizabeth Peters and Donald M. Waldman. "Tax Credits, Labor Supply and Child Care: Theory and Measurement." Presented: Denver, CO, Population Association of America Meetings, April 1992. |