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Crowding out Dad? The Effect of a Cash-for-Care Subsidy on Family Time Allocation

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  • Nina Drange

    (Statistics Norway)

Abstract

This paper expands our understanding of possible specialization effects of extended parental leave policies. Identification is based on the introduction of the Cash-for-Care program in Norway in 1998, which increased mothers’ incentives to withdraw from the labor market when their child was one and two years old. I estimate difference-in-differences models exploiting variation in individuals' exposures to the program among families with similar structures. Consistent with Schøne (2004) I find that the cash-for-care program decreased mothers’ labor force participation by about four percentage points. Notably, however, I find no evidence that the fathers work more to compensate for the mothers’ declined labor supply.

Suggested Citation

  • Nina Drange, 2015. "Crowding out Dad? The Effect of a Cash-for-Care Subsidy on Family Time Allocation," Nordic Journal of Political Economy, Nordic Journal of Political Economy, vol. 40, pages 1-2.
    • Handle: RePEc:noj:journl:v:40:y:2015:p:2
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    References listed on IDEAS

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    Cited by:

    1. Synøve N. Andersen & Nina Drange & Trude Lappegård, 2018. "Can a cash transfer to families change fertility behaviour?," Demographic Research, Max Planck Institute for Demographic Research, Rostock, Germany, vol. 38(33), pages 897-928.
    2. Collischon, Matthias & Kühnle, Daniel & Oberfichtner, Michael, 2020. "Cash-for-care, or caring for cash? The effects of a home care subsidy on maternal employment, childcare choices, and children s development," IAB-Discussion Paper 202025, Institut für Arbeitsmarkt- und Berufsforschung (IAB), Nürnberg [Institute for Employment Research, Nuremberg, Germany].
    3. Gruber, Jonathan & Huttunen, Kristiina & Kosonen, Tuomas, 2022. "Paying Moms to Stay Home: Short and Long Run Effects on Parents and Children," Working Papers 151, VATT Institute for Economic Research.
    4. Andersland, Leroy & Nilsen, Øivind A., 2016. "Households’ responses to price changes of formal childcare," Discussion Paper Series in Economics 20/2016, Norwegian School of Economics, Department of Economics.

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    More about this item

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity

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