Current Issues in Child Care and Parents' Labour Supply

Online, September 4, 2009 (Newswire.com) - Melbourne, Australia - 4 September, 2009- The use of child care is integral in enabling the primary caregiver in a household to participate in the labour force.

Published in the September 2009 issue of the Australian Economic Review, the paper 'Children, Labour Supply and Child Care: Challenges for Empirical Analysis', provides an overview of important issues on child care and its role in enabling parents to re-enter the labour force.

The author, Associate Professor Guyonne Kalb (Director of the Labour Economics and Social Policy research program at the Melbourne Institute), focuses on Australian policy and results from research in her discussion of the analytical challenges and areas requiring more study. She found that the degree to which child-care costs are expected to reduce the participation of mothers in the labour force differs substantially between households. "Not surprisingly, those most affected are on low wages and have preschool children" said Associate Professor Kalb.

Associate Professor Kalb notes that analysis of the effect of costs or fees on child-care demand and labour supply is complicated by the fact that people's decisions can be influenced by the availability and quality of child-care from which to choose. Analysis is further complicated because data are not available on many of the other relevant factors in child-care choices - such as the proximity to support from close relatives.

In the economics literature relatively little attention is paid to the effect of child-care use on child development. Nevertheless, this may be an important factor in the decision to use child care and is likely to be related to the quality of child care.

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This paper is published in September 2009, Australian Economic Review (Vol. 42, Issue 3).
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