Arbeitspapier

The Effect of Child Care Costs on Gender Inequality

We develop a model to study the impact on gender gaps in participation and wages of a liquidity constraint that prevents some households from paying child care. We show that this liquidity constraint generates an inefficiency and amplifies gender gaps in the labour market. In this framework, an extension of paid maternity leave duration has ambiguous effects on gender inequality. In contrast, child care subsidies, which require higher taxes, and loans, which do not, unambiguously reduce gender inequality. We illustrate the mechanisms at play in a numerical example using Spanish data.

Language
Englisch

Bibliographic citation
Series: CESifo Working Paper ; No. 9827

Classification
Wirtschaft
Economics of Gender; Non-labor Discrimination
Demographic Economics: Public Policy
Fertility; Family Planning; Child Care; Children; Youth
Subject
liquidity constraints
gender wage and participation gaps
statistical discrimination
numerical example

Event
Geistige Schöpfung
(who)
Casarico, Alessandra
Del Rey, Elena
Silva, José Ignacio
Event
Veröffentlichung
(who)
Center for Economic Studies and ifo Institute (CESifo)
(where)
Munich
(when)
2022

Handle
Last update
20.09.2024, 8:23 AM CEST

Data provider

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Object type

  • Arbeitspapier

Associated

  • Casarico, Alessandra
  • Del Rey, Elena
  • Silva, José Ignacio
  • Center for Economic Studies and ifo Institute (CESifo)

Time of origin

  • 2022

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