The Effect of Child Care Costs on Married Women's Labor Force Participation

TLDR

The study examines how child‑care costs affect married women’s labor‑force participation. Child‑care costs were estimated with a generalized Tobit model adjusted for selection bias. Higher child‑care costs lower married women’s labor‑force participation, and the lower participation among mothers of preschoolers is fully explained by these costs and the endogeneity of child number. © 1992 MIT Press.

Abstract

The effect of child-care costs on the probability that married women with children will participate in the labor market is examined. Child-care costs are estimated.using a generalized Tobit specification corrected for selection. Estimates of a structural probit model of labor-force participation provide evidence to support the prediction that increased child-care costs lower the probability of participation. It is also shown that the lower rate of labor-force participation among mothers of preschoolers is entirely the result of the higher child-care costs faced by these women and endogeneity of the number of young children in the participation equation. Copyright 1992 by MIT Press.