the effectiveness of child care subsidies in encouraging the welfare to work transition of low income single mothers in recent years public attitudes toward single mothers have changed dramatically and policymakers are being pressed to devise reforms that will reduce their welfare dependency in the summer of 1994 at least 11 separate welfare reform proposals were being debated by congressional committees because child care is relatively expensive compared to potential earnings for single mothers extensions to current child care assistance programs will be an integral component of any welfare reform package very little evidence exists regarding child care utilization patterns and links to employment for low income mothers exceptions include mark berger and dan black 1992 and the recent congressional testimony given by jane ross 1994 of the gao contributing to the changing attitudes toward welfare recipients is the change in the demographic makeup of the labor force overall female labor force participation rates have grown dramatically in the past 30 years from 45 percent in the mid 1960 s to 75 percent in the early 1990 s as a result subsidizing poor single mothers so that they can stay at home with their children while more and more married mothers are working for pay has become less popular this has led to the encouragement of work particularly full time work as a means of poverty reduction for single mothers unfortunately child care costs represent a significant employment barrier on average child care costs 63 per week overall and 44 per week for care by a relative for the typical single mother child care costs range between 15 percent and 30 percent of earned income depending on the mode of care and hourly wage 2

clearinghouse banks and banknote over issue abstract the paper presents a model of banks as clearinghouses of private debt where money is used as the means of payment implications of the model include i the private provision of banknotes or a discount window may be needed to avoid the insufficient debt clearing that results from an inflexible currency stock and ii an uncontrolled total money stock may result in a multiplicity of equilibria including an inflationary banknote over issue

price of high quality daycare and female employment using local variation between municipalities i analyze the degree to which the price of high quality publicly subsidized childcare affects female employment following maternity leave importantly prices are income dependent and thus likely endogenous yet by exploiting information on minimum income compensation during non employment i bypass this problem the results show that the price negatively affects employment a price increase of 1 per month decreases employment by 0 08 which corresponds to a price elasticity of 0 17 these effects prevail during the first 12 months after childbirth i also find that availability of childcare increases employment

a model of labor supply fixed costs and work schedules abstract to analyze labor supply allocations we propose a three dimensional labor supply framework that distinguishes between hours worked per day days worked per week and workweeks individuals make labor supply choices given heterogeneous schedule dependent fixed costs of work the three margins are not perfect substitutes leisure on days not worked in a workweek has the largest weight in preferences leisure on weeks off has the smallest weight we use the model to analyze heterogeneous response to changes in fixed costs schedule flexibility and restrictions on weekly hours fixed costs of work affect response to each policy and determine associated losses

no fault divorce laws and the labor supply of women with and without children we use a difference in difference in difference estimator to compare changes in labor force participation weeks and hours of work associated with no fault divorce laws allowing for differential responses for married women with and without children although other research has found that the labor supply of women in general does not respond to no fault divorce laws we find that no fault divorce laws are associated with increases in the labor supply of married mothers relative to married nonmothers even after controlling for changes in female labor supply in states without no fault divorce laws and for property division rules associated with the laws

child care and the labor supply of married women reduced form evidence this paper empirically analyzes family demands for market and nonmarket child care services and the impact of these demands on the work effort of married women the paperfirst develops a general model of child care and labor force participation the model predicts that higher wages increase the likelihood of labor force participation and that higher costs decrease the likelihood of child care utilization the paper then develops a threeequation reduced form econometric specification of the general model the equations in the specification are estimated simultaneously using 1985 data from the survey of income program participation the estimates reveal that the cost of market child care has a strong negative effect on the labor supply of married women

evaluating the effects of childcare policies on children s cognitive development and maternal labor supply to explore the role of childcare policies in the development of early cognitive skills this paper jointly estimates a cognitive achievement production function and a dynamic discrete choice model of maternal labor supply and childcare decisions using counter actuals from the model i investigate how the designs of two childcare programs head start and childcare subsidies affect the formation of cognitive skills through maternal work and childcare decisions the results suggest large impacts on cognitive skills from expanding head start to current noneligibles and negligible impacts of subsidies on cognitive skills of current eligibles abstract from author

is the household demand for in home services sensitive to tax reductions the french case our paper examines the impact of tax reductions on the demand for services in the home for that purpose we estimate a structural model of demand for such services by using household individual data collected by insee paris in 1996 in this model the net hourly wage paid to the domestic employee the household preferences for consumption of in home services and the decision to take advantage of the tax reduction are considered as endogenous variables estimation of the econometric model uses the fact that some households are observed to consume domestic services and to take advantage of the tax reduction while others either consume such services but do not take advantage of the tax reduction or do not consume these services at all its identification relies on an exclusion restriction resulting from the tax credit schedule results show that the probability of consuming in home services increases with age and income a 10 increase in the tax reduction would increase from 45 9 to 50 8 the proportion of households benefiting from the tax reduction among those who consume paid in home services moreover 13 5 of households who do not actually consume such services would do so after the 10 increase in the tax reduction these simulated variations would mainly concern high income households

employment transitions of women in india a panel analysis abstract this study analyses employment transitions of working age women in india the puzzling issue of low labour force participation despite substantial economic growth strong fertility decline and expanding female education in india has been studied in the recent literature however no study so far has looked into the dynamics of employment in terms of labour force entry and exit in this context using a nationally representative panel dataset we show that women are not only participating less in the labour force but also dropping out at an alarming rate we estimate an endogenous switching model that corrects for selection bias due to initial employment and panel attrition to investigate the determinants of women s entry into and exit from employment we find that an increase in wealth and income of other members of the household leads to lower entry and higher exit probabilities of women along with the effects of caste and religion this result reveals the importance of cultural and economic factors in explaining the low workforce participation of women in india we also explore other individual and household level determinants of women s employment transitions moreover we find that a large public workfare program significantly reduces women s exit from the labour force our study indicates that women s entry and exit decisions are not necessarily symmetric and it is important to consider the inter temporal dependence of labour supply decisions

maternal labor supply and the availability of public pre k evidence from the introduction of prekindergarten into american public schools in the 1980s and 1990s many states began to provide funding for prekindergarten programs for the first time this paper takes advantage of the staggered timing in program funding to investigate the effect that increased availability of prekindergarten programs has on the labor supply of mothers with four year olds i find that mothers with a four year old and no younger children were significantly more likely to be in the labor force and employed once prekindergarten became available and that these effects were largest for single low educated mothers and married college educated mothers mothers with a four year old and other younger children were also significantly more likely to be in the labor force and employed although these effects were smaller in magnitude and not significant for specific subpopulations

bank regulation as an antidote to price level instability abstract we use an overlapping generations model with a risky storage technology to describe a new type of sunspot equilibrium characterized by excessive price level volatility and overinvestment in stored goods the features of this equilibrium lead us to interpret it as involving speculation and as arising when banks create excessive quantities of money this interpretation provides welfare justification for imposing quantity limits on the bank money stock we argue that the monetary regime established in england under peel s act imposed such a quantity limit our findings support quantity theorists traditional view that the possibility of overissue provides a rationale for bank regulation

assessing the impact of framing on the comparative favourability of nuclear power as an electricity generating option in the uk in 2007 the uk government s public consultation on the future of nuclear power courted much criticism three studies were conducted to assess whether key arguments used by government within this consultation might have influenced public opinion about the technology participants first read a passage of text that made salient certain positive climate change mitigation increased energy security or negative nuclear waste aspects of the nuclear debate participants then completed a task that required them to create an electricity mix for the uk by varying the contributions made by each of five energy sources coal gas nuclear renewables and electric import study 1 seemed to indicate that pitching the debate in terms of climate change mitigation was effective in increasing endorsement of nuclear power the results of studies 2 and 3 however contested this conclusion suggesting that these arguments were having little direct impact upon participants preferences for nuclear power the results of these studies hold implications for uk energy policy and attitude assessment and can contribute to the understanding of how the arguments used by government in the 2007 consultation might have influenced public opinion

money for nothing universal child care and maternal employment abstract the strong correlation between child care and maternal employment rates has led previous research to conclude that affordable and readily available child care is a driving force both of cross country differences in maternal employment and of its rapid growth over the last decades we analyze a staged expansion of subsidized child care in norway our precise and robust difference in differences estimates reveal that there is little if any causal effect of subsidized child care on maternal employment despite a strong correlation instead of increasing mothers labor supply the new subsidized child care mostly crowds out informal child care arrangements suggesting a significant net cost of the child care subsidies

can we improve the structure of financial systems 1993 the main theme of this paper is that several of the characteristics of our present western monetary and banking systems have been crucially dependent on the particular temporal process of historical development and are not an essential feature of more fundamental preferences or technological conditions they exist in part because we take them for granted it is the purpose of this paper to examine what might change in both theory and practice if some of these inessential characteristics were to be changed

the real bills doctrine versus the quantity theory a reconsideration two competing monetary policy prescriptions are analyzed within the context of overlapping generations models the real bills prescription is for unfettered private intermediation or central bank operations designed to produce the effects of such intermediation the quantity theory prescription in contrast is for restrictions on private intermediation designed to separate money from credit although our models are consistent with quantity theory predictions about money supply and price level behavior under these two policy prescriptions the models imply that the quantity theory prescription is not pareto optimal and the real bills prescription is

the impact of child care costs on the labour supply of married mothers evidence from canada this paper provides estimates for canada of the impact of childcare costs on the labor supply of married mothers this is done by linking two microdata sources the 1988 canadian national child care survey and the 1988 labour market activity survey the key results show that the market wage and childcare costs have respectively a significant positive and negative impact on both hours of work and the labor force participation decision by married mothers the childcare cost elasticities for labor force participation and hours of work are reported to be 0 38 and 0 32 respectively

the effect of child care costs on married women s labor force participation 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

women s career choices social norms and child care policies our model explains the observed gender specific patterns of career and child care choices through endogenous social norms we study how these norms interact with the gender wage gap we show that via the social norm a couple s child care and career choices impose an externality on other couples so that the laissez faire is inefficient we use our model to study the design and effectiveness of three commonly used policies we find that child care subsidies and women quotas can be effective tools to mitigate or eliminate the externality parental leave however may even intensify the externality and decrease welfare

child care costs as a barrier to employment for single and married mothers because women typically serve as primary care providers for their children female labor force participation behavior is likely to be affected significantly by the costs associated with replacing maternal care with nonmaternal care while some evidence of this phenomenon exists in the economics literature discrepancies across studies make it difficult to provide conclusive evidence of the employment effects of these child care costs this paper uses an improved sipp survey design to present new evidence regarding the degree to which child care prices impede mothers employment behavior with additional evidence of the difference in these elasticities across marital status empirical technique and equation specification this permits linking this paper to the existing evidence drawing the conclusion that child care prices impede mothers employment behavior significantly with single mothers exhibiting less responsiveness in their labor force participation behavior to child care price changes than marri

joint labor supply and childcare choice decisions of married mothers this paper examines the impact of childcare prices and wage rates on the joint employment and childcare mode center sitter relative and husband choice decisions of married mothers by estimating both a mixed logit and universal logit choice model data are drawn from the 1988 canadian national child care survey and the 1988 labour market activity survey the estimation results show that wages have a positive impact on the probability of choosing any of the working states and that childcare prices for center sitter and relative care reduce the probability of working and using each respective mode of care sensitivity analyses reveal that the wage elasticity for employment is fairly robust across model specifications while the own price elasticity of childcare is sensitive to model specification differing identifying assumptions in the estimation of childcare price equations and sample selection the simulation results show that differences exist in the degree to which government subsidies in the form of wage subsidies targeted childcare subsidies or unconditional childcare subsidies impact on labor supply decisions and decisions to substitute across different modes of care by those mothers already in the labor market

child care subsidies quality of care and the labor supply of low income single mothers the authors examine the effects of child care subsidies on the labor supply decisions of low income mothers and o n the quality of care their children receive using newly gathered data on two programs that subsidize the child care expenditures of families in kentucky they find that single mothers who receive child care subsidies are more likely to be employed and are generally more satisfied with the care their children receive but subsidies have little effect on hours worked copyright 1992 by mit press

price quality and income in child care choice recent legislation may substantially expand federal assistance in paying for child care this paper examines the potential effects of three aspects of federal assistance reducing child care price through vouchers or grants to providers improving its quality through incentives or regulation and increasing family income through tax credits on the child care choices employed mothers make the data come from the 1985 wave of the national longitudinal survey of youth ohio state university both multinomial and universal logit models are used the results suggest that price is a critical variable in child care choice the higher the price the lower the probability a mode of care will be chosen parents do not consistently select high quality care although overall quality improvements may increase the use of family day care mothers who earn more per hour and families who have higher incomes other than the mother s earnings are more likely to select center care over other modes consequently subsidizing child care expenditures directly through vouchers and reduced fees or increasing other family income through tax credits consistently increases the use of center based programs all else equal

stochastic inflation and government provision of indexed bonds abstract this paper examines the consequences of using indexed bonds as one of the government financing instruments along with money and taxes it is shown that open market operations between money and indexed bonds do not matter in a real sense despite their different risk characteristics increasing the share of indexed bonds in the government portfolio increases the volatility and the conditional mean of real rates of return on money when provided by means other than open market operations indexed bonds can affect the allocation of resources but these reallocations cannot be pareto improving

family proximity childcare and women s labor force attachment we show that close geographical proximity to mothers or mothers in law has a substantial positive effect on the labor supply of married women with young children we argue that the mechanism through which proximity increases labor supply is the availability of childcare we interpret availability broadly enough to include not only regular scheduled childcare during work hours but also an insurance aspect of proximity e g a mother or mother in law who can to provide irregular or unanticipated childcare using two large datasets the national survey of families and households and the public use files of the u s census we find that the predicted probability of employment and labor force participation is 4 10 percentage points higher for married women with young children living in close proximity to their mothers or their mothers in law compared with those living further away

exchange rate volatility in an equilibrium asset pricing model this paper analyzes a stochastic model of exchange rate determination with unrestricted access to capital and currency markets it is shown that the only restriction imposed by the model on the equilibrium exchange rate is that it satisfy a martingale property this implies that for a given real equilibrium allocation which is optimal the model can display varying amounts of exchange rate volatility and that volatility is unrelated to the welfare properties of the equilibrium allocation whether or not volatility is excessive therefore depends on which equilibrium is chosen as the basis for comparison copyright 1990 by economics department of the university of pennsylvania and the osaka university institute of social and economic research association

quasifundamental variation in the price level and the inflation rate abstract this paper describes a class of overlapping generations economies that have quasifundamental qf equilibria equilibria in which the price level and inflation rate are positively correlated with a fundamental random variable despite the existence of an alternative pareto dominant equilibrium in which the price level and or inflation rate are constant in qf equilibria the inflation rate is excessively variable using either quantitative or welfare based variability measures these equilibria also provide rational expectations adjustment processes under which the low inflation monetary steady state is dynamically stable journal of economic literature classification numbers e31 e32 e41

marital status and full time part time work status in child care choices using recent sipp data this study estimates two econometric models to study the differences in the effect of child care costs on employment status and differences in the mode of child care used controlling for employment status for both married and single women full time employment is more elastic with respect to changes in the price of child care than part time employment and employment elasticities are larger for single than married mothers in the model of child care modal choice we find that an increased probability of full time employment is associated with an increase in the use of centre care for both married and single mothers and that price elasticities of modal choice are larger for single than married mothers

irrelevance of open market operations in some economies with government currency being dominated in rate of return this paper describes an environment in which government issued currency is dominated in rate of return and in which there obtains a modigliani miller theorem for government open market operations earlier modigliani miller theorems for government finance have been stated for environments in which government issued currency is not dominated in rate of return in equilibrium since government issued currency is widely observed to be dominated in return it is useful to study how modigliani miller theorems hinge on absence of rate of return dominance

tax credits labor supply and child care we explore the impact of the child care tax credit in the u s income tax system on the labor supply decisions of married women with young children by incorporating the cost of child care into a st

childcare subsidies wages and employment of single mothers this paper develops and estimates a model for the choice of part time and full time employment and the decision to pay for childcare among single mothers the results indicate that a lower childcare price and a higher full time wage rate both lead to an increase in overall employment and the use of paid childcare the part time wage effects are found to be too small to have significant behavioral implications an analysis of cost effectiveness indicates that the additional hours of work generated per dollar of government expenditure is larger for a childcare subsidy than a wage subsidy

legal restrictions sunspots and peel s bank act the real bills doctrine versus the quantity theory reconsidered this paper considers two questions i what is the purpose of legal restrictions intended to separate money from credit markets and ii is such a separation desirable it is argued that historical legal restrictions meant to achieve such a separation were designed to preclude the occurrence of sunspot equilibria it is also shown that a coherent model can be constructed in which sunspot equilibria exist in the absence of legal restrictions but not if money and credit markets are separated nevertheless there is no obvious welfare justification for such a separation

are sunspots necessary in this paper i show the existence of stationary rational expectations equilibria in a simple two island overlapping generations model of the type first considered by lucas in which all uncertainty is endogenous the result is obtained by first constructing sunspot equilibria on each island separately and then using the equilibrium pricing equations to eliminate the sunspot variable in the resulting equilibrium each island s prices serve as the sunspot for the other island the constructed equilibrium is nontrivially stochastic

labour underutilisation in metropolitan labour markets in australia individual characteristics personal circumstances and local labour markets there has been a growing awareness that the issue of labour market disadvantage is substantially greater than merely considering unemployment and the ability to find a job there is an increasing l

a structural model of child care and the labor supply of married women this article empirically examines married women s labor supply and child care expenditures the article uses winter 1984 85 data from the survey of income and program participation to estimate a fu

child care costs and family labor supply this paper presents a theoretical and empirical analysis of the effects of child care costs on family labor supply and the demand for market child care the model is a framework for cross section estimation of the effects of child care costs on labor supply and child care use it applies to households having young children requiring continuous care and in which both the mother and 1 other potential child care provider are present the 3 potential sources of child care are the mother the potential informal provider and the market using data from the 1980 baseline household survey of the employment opportunity pilot projects this empirical analysis uses a subsample of 6170 households in which there is a married woman under age 45 with her spouse present at the time of the survey at least 1 child under age 14 and nonmissing data on key variables results show that 1 higher market child care costs discourage women from working even when an informal source of care is available indicating that such informal care is an imperfect substitute for market care 2 a higher wage rate for the mother encourages her to work thus a higher wage rate increases the probability of using market child care 3 the number of children requiring care has a negative impact on the probability of the women working with the largest impact caused by younger children 4 nonwage income has a negative impact on the probability of the woman working and 5 black women are more likely to work than whites and are statistically more likely than whites to use market child care if they do work this family labor supply model predicts that the cost of market child care will affect household decisions on labor supply and child care use estimates of a qualitative choice model provide strong confirmation that child care costs affect such decisions the responsiveness of the labor supply of mothers to child care costs demonstrated in this study indicate that such subsidies do have their intended effect of encouraging labor supply the fact that a large proportion of current child care subsidies benefit primarily middle and upper income families via the income tax credit suggests that the labor supply effets of such subsidies may in practice be stronger for less needy families than for low income families employer subsidized child care may become an increasingly popular tool for attracting mothers into the labor force

a structural model of labor supply and child care demand this paper specifies and estimates a structural model in which the decision to purchase market child care and the quality purchased is made simultaneously with the employment decision of the mother separate analyses are performed for married mothers and single mothers the structural estimates are used to simulate the effects and costs of changes in the federal child care tax credit the simulations indicate that a refundable child care tax credit would distribute child care benefits more equally across the population by increasing the shares of subsidies received by low income families and would induce a considerable increase in expenditures on market child care labor supply also increases but by considerably less than child care expenditures a surprising result is that despite large increases in child care