RT Journal Article
T1 Subsidising formal childcare versus grandmothers' time: Which policy is more effective?
A1 Osuna, Victoria
K1 Female employment
K1 Fertility
K1 Childcare subsidies
K1 Childcare costs
K1 Grandmother childcare
AB This article quantifies the relative effectiveness of childcare subsidies and subsidies on grandmothers’ time on married mothers’ employment and fertility rates,paying special attention to heterogeneous effects. A heterogeneous agent model, populated by married households who make decisions related to labour supply andfertility, and the Spanish economy are used as a benchmark for calibration. The results indicate that childcare subsidies conditional on employment are more effectivethan subsidies on grandmothers’ time to foster the participation of married mothers in the labour force. However, they induce women to work fewer hours, unless afterschoolhours are also subsidised. This overtime subsidy is also necessary for the fertility rate to increase, but it implies a significant adjustment in tax rates to maintain the same fiscal balance. If the aim is simply to raise the employment rate of mothers of children aged 2 years or younger, then subsidising childcare costs only is more effective because the fiscal effort is lower. Regarding the heterogeneous effects, in all the policies studied, the growth in female employment is mainly accounted for by the behaviour of women without tertiary educationwhile that of fertility is accounted for by women with tertiary education. Considerations related to inequality and distributional effects of these policies would alsoseem to favour childcare subsidies versus subsidies on grandmothers’ time.
PB The Gruyter
YR 2021
FD 2021
LK https://hdl.handle.net/10433/25569
UL https://hdl.handle.net/10433/25569
LA en
NO Economics 2021; 15:85-111
NO Este trabajo se ha realizado gracias a la financiación del proyecto PAI SEJ-513
NO Departamento de Economía, Métodos cuantitativos e Historia Económica
DS RIO
RD Apr 28, 2026