Tekin, Erdal. 2007. “Childcare Subsidies, Wages, and Employment of Single Mothers.” Journal of Human Resources 42(2): 453–487.
This paper develops and estimates a model for the choice of part-time and full-time employment and the decision to pay for childcare among single mothers. The results indicate that a lower childcare price and a higher full-time wage rate both lead to an increase in overall employment and the use of paid childcare. The part-time wage effects are found to be too small to have significant behavioral implications. An analysis of cost-effectiveness indicates that the additional hours of work generated per dollar of government expenditure is larger for a childcare subsidy than a wage subsidy.
Erdal Tekin is an assistant professor of economics at the Andrew Young School of Policy Studies at Georgia State University, a faculty research fellow at NBER, and a research fellow at IZA. The author thanks David Blau, Naci Mocan, Thomas Mroz, David Ribar, Paula Stephan, and seminar participants at University of North Carolina at Chapel Hill, Tulane University, Georgia State University, Urban Institute, Research Triangle Institute (RTI), and the Institute for the Study of Labor (IZA) in Germany for helpful comments and suggestions. The author is also grateful for research support from the Child Care Bureau and the UPS Foundation. The data used in this article can be obtained beginning October 2007 through September 2010 from Erdal Tekin, P.O. Box 3992, Atlanta, GA 30302-3992 tekin@gsu.edu.