Review of Economics of the Household

, Volume 3, Issue 2, pp 145–170 | Cite as

The Effect of a Family Policy Reform on Mother’s Pay: A Natural Experiment Approach

Article

Abstract

All parents in Norway with children aged one to three, who do not attend publicly subsidised day care, are entitled to a cash-for-care (CFC) subsidy. Studies have shown that the reform has reduced mother’s labour supply. In this paper we analyse wage effects of the reform. We put forward a framework for evaluating reforms when reforms are uniformly and equally accessible nation-wide. First, running a simple Difference in differences (DD) analysis, results suggest that the CFC reform has reduced the mother’s wages. However, after controlling for “the age of the child” effect, by running a triple difference approach, we no longer find any evidence of negative wage effects.

Keywords

child care wages public policy difference-in-differences-in-differences 

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Copyright information

© Springer Science+Business Media, Inc. 2005

Authors and Affiliations

  1. 1.Institute for Social ResearchElisenbergNorway

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