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.
Similar content being viewed by others
References
James Albrect et al. (1998) ArticleTitle“Career Interruptions and Subsequent Earnings: A Reexamination using Swedish data” The Journal of Human Resources XXXIV 294–311
Asplund Rita. et al. (1996). “Wage Distribution Across Individuals.” In Eskil Wadensjö (ed.), The Nordic Labour Markets in the 1990s. Amsterdam: Elsevier Science B.V
Bertrand Marianne., Esther Duflo., Sendhil Mullainathan. (2002). “How much Should we Trust Differences-in-Differences Estimates?” Working Paper No. 8841. National Bureau of Economic Research. Massachusetts USA
Gupta Datta Nabanita Smith Nina (2002) ArticleTitle“Children and Career Interruptions: The Family Gap in Denmark” Economica 69 609–629 Occurrence Handle10.1111/1468-0335.00303
Jonathan Gruber (1994) ArticleTitle“The Incidence of Mandated Maternity Benefits” American Economic Review 84 622–641 Occurrence Handle1:STN:280:ByuB1MjgtFY%3D Occurrence Handle10134748
Harkness Susan., Jane Waldfogel. (2003). “The Family Gap in Pay: Evidence from Seven Industrialized Countries.” In Solomon Polachek (ed.), Worker Well-Being and Public Policy. Research in Labor Economics. Jai Press Inc
James Heckman (1979) ArticleTitle“Sample Selection Bias as a Specification Error” Economterica 47 153–162
Hellevik, Tale. (2000). Småbarnsforeldres yrkesdeltakelse og valg av barnetilsyn før o getter kontantstøttens innføring.” (In Norwegian) Report 2000/02. Norsk institutt for forskning om oppvekst, velferd og aldring (NOVA)
Heather Joshi Paci Pierella Waldfogel Jane (1999) ArticleTitle“The Wages of Motherhood: Better or Worse?” Cambridge Journal of Economics 23 543–564 Occurrence Handle10.1093/cje/23.5.543
Kitterød, Ragni. (2003). Tid til barna? Tidsbruk og samsvar med barn blant mødre med barn i kontantstøttealder (In Norwegian). Report 2003/05. Statistics Norway
Kitterød, Ragni and Randi Kjeldstad. (2004). Foreldres arbeidstid 1991–2001. Belyst ved SSBs arbeidskraftundersøkelser, tidsbruksundersøkelser og levekårsundersøkelser (In Norwegian). Report 2004/06. Statistics Norway
Milligan, Kevin. (2002). “Subsidizing the Stork: New Evidence on Tax Incentives and Fertility.” Working Paper No. 8845. National Bureau of Economic Research. Massachusetts USA
Jacob Mincer Polachek Solomon W (1974) ArticleTitle“Family Investments in Human Capital: Earnings of women” Journal of Political Economy 82 576–608
Jacob Mincer Ofek Haim (1982) ArticleTitle“Interrupted Work Careers: Depreciation and Restoration of Human Capital” Journal of Human Resources 17 3–24
OECD (1996), Employment Outlook. Paris
Ondrich Jan., Katharina C. Spiess., Qing Yang. (2001). “The Effect of Maternity Leave on Women’s Pay in Germany 1984–1994.” Discussion paper 289. German Institute for Economic Research
Pettersen Silje Vatne. (2003). Barnefamiliers tilsynsordninger, yrkesdeltakelse og bruk av kontantstøtte våren 2002 (In Norwegian). Report 2003/09. Statistics Norway
Reppen Heidi., Elisabeth Rønning. (1999). Barnefamiliers tilsynsordninger, yrkesdeltakelse og bruk av kontantstøtte våren 1999 (In Norwegian). Report 1999/27. Statistics Norway
Christopher Ruhm (1998) ArticleTitle“The Economic Consequences of Parental Leave Mandates: Lessons from Europe” Quarterly Journal of Economics 113 285–317 Occurrence Handle10.1162/003355398555586
Rønsen Marit. (2001). Market work, child care and the division of household labour. Adaptations of Norwegian mothers before and after the cash-for-care reform. Report 2001/03. Statistics Norway
Marit Rønsen Sundstrøm Marianne (1996) ArticleTitle“Maternal Employment in Scandinavia: A Comparison of the After-Birth Employment Activity of Norwegian and Swedish women” Journal of Population Economics 9 267–285 Occurrence Handle12291883
Schøne, Pål. (2004a). “Labour Supply Response to Cash-for-Care Subsidy.” Journal of Population Economics (forthcoming)
Schøne, Pål. (2004b). “Kontantstøtten og mødres arbeidstilbud: Varig effekt eller retur til arbeid?” (In Norwegian). Norsk økonomisk tidsskrift (forthcoming)
H. Lawrence Summers (1989) ArticleTitle“Some Simple Economics of Mandated Benefits” American Economic Review 79 177–183
Jane Waldfogel (1997) “Working Mothers Then and Now: A Cross-Cohort Analysis of the Effect of Maternity Leave on Women’s Pay” Francine D. Blau Ronald G. Ehrenberg (Eds) Gender and family issues in the workplace Russell Sage New York
Jane Waldfogel (1998) ArticleTitle“The family gap for young women in the United States and Britain: Can maternity leave make a difference?” Journal of Labor Economics 16 505–545 Occurrence Handle10.1086/209897
Jane Waldfogel (1999) ArticleTitle“The impact of the Family and Medical Leave Act” Journal of Policy Analysis and Management 18 281–302 Occurrence Handle10.1002/(SICI)1520-6688(199921)18:2<281::AID-PAM5>3.0.CO;2-J
Author information
Authors and Affiliations
Corresponding author
Rights and permissions
About this article
Cite this article
Schøne, P. The Effect of a Family Policy Reform on Mother’s Pay: A Natural Experiment Approach. Rev Econ Household 3, 145–170 (2005). https://doi.org/10.1007/s11150-005-0708-y
Received:
Accepted:
Issue Date:
DOI: https://doi.org/10.1007/s11150-005-0708-y