Women's labour force participation and child care in Romania

This paper models household demand for childcare and mothers' labour force participation in Romania. The model estimates the effects of the price of childcare, mothers' wages, and household characteristics on household behaviour with respect to childcare and maternal employment. We find that both the maternal decision to become employed and the decision to use out-of-home care are sensitive to the price of childcare. A decrease in the price of care can increase the number of working mothers and thus can reduce poverty in some households. We also find that the potential market wage of the mother has a significant positive effect on the decision to purchase market care and on the decision to engage in paid employment. The level of household non-wage income has little effect on maternal employment and on the demand for childcare.