Volume 27, Number 1 (Winter) 1992
Gustafsson, Siv and Frank Stafford. 1992. "Child Care Subsidies and Labor Supply in Sweden." Journal of Human Resources 27(1):204-230.
This paper utilizes data from a Swedish household survey for 1984 (the HUS data) in combination with data on public child care 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 child care and labor supply decision is analyzed by logit and ordered probit choice models. We find that the high quality public child care in Sweden encourages labor market activity of women with preschoolers even when the spouse's income is high, and that when spaces are not rationed, a lower price encourages use.
Siv Gustafsson is a professor of economics at the University of Amsterdam. Frank Stafford is a professor of economics at the Institute for Social Research at the University of Michigan. They acknowledge helpful comments on earlier versions of the paper from David Brownstone, Saul Hoffman, Anders Klevmarken, four anonymous referees, and participants at the Göteburg Conference on the Swedish Household Survey (HUS) as well as participants at the Labor Economics Seminar at the University of Michigan and the Arbetslivscentrum in Stockholm. The data used in this article can be obtained beginning in June 1992 through June 1995 from Professor Siv Gustafsson at the following address: Department of Economics, University of Amsterdam,1011 NH Amsterdam, The Netherlands.
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