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Wages, taxes and publicly provided day care
Uppsala University, Disciplinary Domain of Humanities and Social Sciences, Faculty of Social Sciences, Department of Economics.ORCID iD: 0000-0001-8826-0410
1998 (English)In: Journal of Population Economics, ISSN 0933-1433, E-ISSN 1432-1475, Vol. 11, no 2, 185-204 p.Article in journal (Refereed) Published
Abstract [en]

Public employment growth has been parallelled by increased female labour force participation, while real wages for typical female public sector occupations have not increased. In a theoretical model we, first, show that there is a tradeoff between day care provision and gross wages for occupations for which day care is a complement. It is possible to combine increased public labour demand with public day care provision leaving the wage unaffected. Second, non-parents will be in favour of increasing day care as long as day care productivity is higher than the inverse of the tax rate. This is because the effective labour supply and, therefore, the tax base increase. Third, parents want to push day care provision even further. They are prepared to accept a lower day care productivity than non-parents because day care provision relaxes the constraint on their desired labour supply. The Pareto efficient day care provision is between parents‘ and non-parents‘ preferred levels.

Place, publisher, year, edition, pages
1998. Vol. 11, no 2, 185-204 p.
Keyword [en]
child care, day care, female labour supply, tax base, public provision of private goods, topping up
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Research subject
URN: urn:nbn:se:uu:diva-42817DOI: 10.1007/s001480050064OAI: oai:DiVA.org:uu-42817DiVA: diva2:70719
Available from: 2008-10-17 Created: 2008-10-17 Last updated: 2013-07-09

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Publisher's full texthttp://econpapers.repec.org/article/sprjopoec/v_3a11_3ay_3a1998_3ai_3a2_3ap_3a185-204.htm

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