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The fiscal return to childcare policies

Author

Listed:
  • David Koll

    (European University Institute)

  • Dominik Sachs

    (LMU Munich)

  • Fabian Stuermer-Heiber

    (LMU Munich)

  • Helene Turon

    (University or Bristol)

Abstract

We study the long-term fiscal implications of childcare subsidies through their impact on maternal labour supply. Taking human capital accumulation into account, we explicitly capture life-cycle career aspects in a dynamic structural household model of female labour supply and childcare decisions: higher labour supply of mothers today can result in higher future earnings. In our dynamic structural model, we allow households to be heterogeneous in their taste for home produced childcare, their taste for leisure and in their access to informal childcare (e.g. by grandparents). Using German survey data, we provide a structural estimate of the degree to which childcare subsidies are dynamically self-financing through higher labour income tax revenue. Further, we explore how the marginal fiscal returns of childcare subsidies depend on the group of families targeted (e.g. low income, single parents, number of children).

Suggested Citation

  • David Koll & Dominik Sachs & Fabian Stuermer-Heiber & Helene Turon, 2019. "The fiscal return to childcare policies," 2019 Meeting Papers 1081, Society for Economic Dynamics.
    • Handle: RePEc:red:sed019:1081
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    References listed on IDEAS

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    Cited by:

    1. Helene Turon, 2022. "The Labour Supply of Mothers," Bristol Economics Discussion Papers 22/769, School of Economics, University of Bristol, UK.

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