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Child care provision and maternal employment lessons from Hungary

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Title: Child care provision and maternal employment lessons from Hungary


1
Child care provision and maternal employment
lessons from Hungary
  • Very preliminary results - please do not quote.
  • Ágota ScharleBudapest Institute for Policy
    Analysis
  • 18 September 2009, Vienna

2
Outline
  • Why increase day care provision-
    fertility/employment trade-off- labour supply
    effects
  • Some evidence
  • How to implement policy proposal for Hungary

3
Why increase day care (1)?
4
Why increase day care (2)?
5
Why increase day care (3)?
(Mis)match of family policy and gender roles
6
Why increase day care (4)?
  • Theory (standard labour supply models) and
    available evidence that
  • - availability of day care increases LS
  • - some cash tranfers reduce LS
  • Apps and Rees (2001), Chevalier and Viitanen
    (2002), Jaumotte (2003), Pissarides (2005),
    Scharle (2007)

7
Why increase day care (5)?
  • Shifting public funds from cash to day care has
    double effect
  • - reducing cash transfers increase LS
  • - increasing day care increase LS
  • but how much?

8
Evidence an empirical study
  • Focus on mothers' employment rate impact of cash
    transfers and day care
  • No other effects considered
  • wellbeing of children, early childhood education
  • wellbeing/equal opportunities of mothers
  • poverty cf Esping-Andersen (2008)?
  • fertility cf Sacerdote and Feyrer (2008)?
  • No prediction on evolution in time/adjustment
  • No alternative policy options considered
  • Based on Köllo and Scharle (2008)?

9
Effects vary by education
10
may be smaller for low educated
11
Estimation strategy
  • Need variation in policy mix
  • Cross country panel, aggregate data
  • Individual cross section with country
    characteristics
  • LHS mother/non-mother employment rate by
    education
  • RHS
  • cash transfers, public day care as of GDP
  • control variables fertility, GDP (attitudes),
    male unemployment (added worker), pay gap and
    female unemployment rate (technological change)?

12
Data
  • Mother/non mother employment rates from EU LFS
  • Family policy variables from Esspros
  • Years between 1998 2005
  • Constraints
  • measureability of institutions, attitudes
  • sample size and variance (Scandinavian data)?
  • comparability of data (definition of employment)?
  • missing variables (private supply of child care,
    costs)?
  • endogeneity welfare model attitudes female
    employment, fertility welfare provisions
    female employment, education fertility
    female employment

13
Estimates
  • Gender participation gapi
  • constant dDi µMi aXi ßYi ?Zi ?i
  • Motherhood employment gapie
  • constant dDi µMi aXi ßYi(e) ?Zi ?i
  • NMS 22 obs, OMS 65 obs (Se - Dk, Fi, No)?
  • women aged 20-44
  • Individual cross section logit estimate
  • 16 countries (incl Cz, Hu, Lv, Lt, Si but no
    Scandinavian)?
  • mothers aged 20-49
  • For three education levels primary, secondary,
    higher

14
Mother/non-mother employment rate
15
Probability of mothers' employment
16
Summary of results
  • Cross-country panel
  • Cash (-) /day care () effects as expected, not
    all significant in OMS
  • also in 3 educational groups
  • most controls as expected
  • Individual cross section
  • individual controls as expected
  • effect of cash (-) and day care () as expected
    in NMS, not significant in OMS

17
Policy implication
  • Shifting 0.1 GDP from cash to day care
  • Primary educated mothersOMS 1,9 point NMS
    12,6 point
  • Secondary educated mothers OMS 1,7 point
    NMS 14,2 point
  • GraduatesOMS 1,3 pointNMS 15,5 point
    increase in employment
  • Effect of cash transfer lt day care

18
A policy proposal for Hungary
  • High spending on cash transfers
  • Long paid maternity leave
  • Poor provision of day care for under 3s
  • Low employment rate of mothers
  • Based on Blaskó et al (2009)?

19
Paid maternity leave among longest
Data for 2006-7, OECD Family database
http//www.oecd.org/dataoecd/45/26/37864482.pdf
20
Maternal employment among lowest
21
Constraints of increasing day care
  • Municipal responsibility
  • 3000 municipalities, avg size among smallest in
    EU
  • Subsidy from central gov covers lt50 of costs
  • Low cap on parental contribution
  • cf goal of ensuring equal access and high quality
  • Political costs

22
A possible solution policy redesign
  • Convert cash allowance to day-care voucher for
    mothers entering employment
  • Compulsory for mothers and for the municipality
  • Allow higher share of parental contribution
  • Additional support for low educated
  • Remove some administrative hurdles
  • Improve quality assurance rating system
  • Link central funding to quality
  • Reduce barriers for non-profit providers

23
A possible solution political costs
  • Shift would be almost self-financing but
  • Beneficiaries not the middle class
  • Attitudes towards gender roles
  • Professional organisations quality,
    competition
  • Mistrust in all government plans
  • Mistrust in market forces (LD-LS)?
  • ? stakeholder analysis, communication

24
References
  • Apps and Rees (2001) Fertility, female labor
    supply and public policy, IZA Discussion Paper
    409.
  • Chevalier and Viitanen (2002) The causality
    between female labour force participation and the
    availability of childcare. Applied Economics
    Letters, 9(14), 915918.
  • Esping-Andersen (2002) A child centred
    social investment strategy. In Esping-Andersn,
    Gallie, Hemerijck, Myles (eds) Why we need a new
    welfare state. Oxford University Press, pp 26-68
  • Jaumotte (2003) Female labour force
    participation past trends and main determinants
    in OECD countries. Economics Department Working
    Papers, No. 376, OECD.
  • Pissarides, Garibaldi, Olivetti, Petrongolo, and
    Wasmer (2005) Women in the labour force how
    well is Europe doing?, in Tito Boeri, Daniela
    del Boca and Christopher Pissarides (Eds) Women
    at Work An Economic Perspective, Oxford
    University Press
  • Sacerdote and Feyrer (2008) Will the Stork
    Return to Europe and Japan? Understanding
    Fertility within Developed Nations NBER 14114.
  • Scharle (2007) The effect of welfare provisions
    on female labour supply in Central and Eastern
    Europe, Journal of Comparative Policy Analysis
    Research and Practice, Volume 9, Issue 2, 157 -
    174 o.
  • Sleebos (2003) Low Fertility Rates in OECD
    Countries Facts and Policy Responses, OECD
    DELSA/ELSA/WD/SEM(2003)15

25
Thank you.
  • Köllo and Scharle (2008) Female labour supply
    and child-care provisions in Europe was funded by
    WORKCARE Social quality and the changing
    relationship between work, care and welfare in
    Europe, a Sixth Framework Programme of the
    European Commission.
  • Blaskó et al (2009) Impact analysis of
    increasing day care capacities for children aged
    1-3 was funded by the Prime Minister's Office of
    Hungary
  • Correspondance agota.scharle_at_budapestinstitute.e
    u
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