Taxing Families: The Impact of Child-related Transfers on Maternal Labor Supply (PDF)
Revise & resubmit at AEJ: Macro
The employment rate of married women with and without pre-school children varies substantially across countries. To what extent can child-related transfers account for this variation? I develop a life-cycle model in which married couples jointly decide their labor supply, female human capital evolves endogenously, and some couples have access to grandparental childcare. I show that child-related transfers can explain most of the variation in the employment rates of married women, even after taking the labor income tax treatment and cross-country variation in childcare fees into account.
Cross-sectional dispersion in hours worked is large. We account for this data fact by developing a framework in which households require market inputs and time to enjoy utility from non-market activities. We take the framework to the data by mapping household expenditures to time-use categories for a large set of activities. The estimated model generates 55 percent of the cross-sectional dispersion of hours worked in the data. Our estimation results suggest that market inputs and time are highly substitutable for any given non-market activity if households are optimizing over a large set of activities. We show that models in which the number of non-market activities is condensed to home production and leisure or in which non-market time is univariate can at most generate 30 percent of the observed hours worked dispersion.
Work in Progress
Earnings Risk and Household Labor Supply
Labor Demand and the Marriage Market (joint with Karen Kopecky)
Formal and Informal Care Arrangements and Maternal Labor Supply