Abstract
It is widely recognized that childcare has important pedagogical, economic and social effects on both children and parents. This paper is the first attempt to estimate a joint structural model of female labour supply and childcare behavior applied to Italy in order to analyse the effects of relaxing the existing constraints in terms of childcare availability and costs by considering public, private and informal childcare. Results suggest that Italian households might alter their childcare and labour supply behaviors substantially if the coverage rate of formal childcare increases to reach the European targets. Overall, increasing child care coverage is estimated to be more effective in enhancing labour incentives than decreasing existing child care costs, at the same budgetary cost.
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Source: ISTAT (2011)
Source: ISTAT (2011)
Source: authors’ calculations based on the rules in place in the main city of each region for a hypothetical family with an Indicator of the Equivalent Economic Situation (ISEE) of 20,000 euro per year
Source: authors’ calculation on IT-SILC 2010 data
Source: authors’ analysis based on EUROMOD
Source: authors’ analysis based on EUROMOD
Source: authors’ analysis based on EUROMOD
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Notes
See Creedy and Kalb (2005) for an extensive review of discrete choice modelling in the analysis of labour supply.
For sake of simplicity, we only model the labour supply and childcare decisions of mothers living with a partner who works full-time and is the main earner of the couple. We assume that the labour supply choice of the male breadwinner partner is fixed.
Potential measurement errors in the underlying survey data need to be kept in mind in the analysis of the results as there are no other surveys useful to compare the results.
An alternative modelling set up is proposed by Kornstad and Thoresen (2007) who assume that each household can choose from a household specific choice set. Labour supply and childcare choices are outcomes of discrete choices from finite sets of jobs and childcare arrangements, where each job is assumed to have fixed working hours, a wage rate and a number of non-pecuniary attributes and each care alternative has fixed opening hours, a specific care price and different quality attributes. Excess demand of childcare is reflected in these opportunity sets where households that face a higher degree of rationing in childcare have fewer childcare options to choose from.
Table 7 in the “Appendix” reports the actual increase at each simulation run at regional level: this shows the extent to which in each simulated scenario childcare increases more in regions where public childcare is scarce. On the one extreme, in the first simulation scenario a 5% increase is simulated in all regions, with only Emilia Romagna reaching the target threshold of 30%. On the other extreme, only in five regions (Molise, Campania, Puglia, Calabria and Sicilia) childcare coverage is increased in the last simulation scenario in order to reach the target of 30%.
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Acknowledgements
The research for this paper has benefited from financial support by the European Union’s Seventh Framework Programme (FP7/2012–2016) under Grant Agreement No. 290613 (ImPRovE: Poverty Reduction in Europe: Social Policy and Innovation; http://improve-research.eu). We are grateful to Ugo Colombino, Luca Gandullia, Tim Goedemé, Dieter Vandelannoote, Gerlinde Verbist, the participants at the European IMA Meeting (2014), at a seminar at CEPS/INSTED (2014), at the ImPRovE Project Meeting (2014) and at the International Tax and Public Finance Conference (2015) for helpful comments. This paper uses EUROMOD version F6.36 and data from the IT-SILC 2010, made available by ISTAT. We are indebted to Holly Sutherland and all members of the EUROMOD project. The authors are solely responsible for any remaining shortcomings and errors.
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Figari, F., Narazani, E. The joint decision of female labour supply and childcare in Italy under costs and availability constraints. Econ Polit 37, 411–439 (2020). https://doi.org/10.1007/s40888-019-00160-w
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DOI: https://doi.org/10.1007/s40888-019-00160-w