A STRUCTURAL MODEL OF CHILD-CARE AND THE LABOR SUPPLY OF MARRIED-WOMEN

This article empirically examines married women's labor supply and child care expenditures. The article uses winter 1984-85 data from the Survey of Income and Program Participation to estimate a fully structural econometric model of labor supply and paid care utilization, Estimation results indicate that the cost of paid care has small negative effects on labor supply but stronger negative effects on paid care utilization. Consequently, subsidy programs such as the Child and Dependent Care Tax Credit appear to have few effects on married mothers' employment.