Child Care and Women's Labor Force Participation in Romania

The paper models the household demand for child care and mothers' labor force participation and working hours in Romania. The model estimates the effects of the price of child care, the mother's wage, and household income on household behavior with respect to child care and mother's employment. We found that both the maternal decision to become employed and the decision to use out-of-home care are sensitive to the price of child care. A decrease in the price of care can increase the number of working mothers and thus can reduce poverty in some households. We also found 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 the maternal employment and on the demand for child care. In addition to facilitating the work of women, kindergartens and cre_ches appear to play an important role in providing educational and social benefits for children: close to half of the children in these facilities having mothers who do not work. Further research is needed to assess the nature and cost of these benefits, and determine the roles of the public and the private sector in the provision, finance and regulation of such services for working and non-working mothers.

Fong and Lokshin (2000)Urban.Model to estimate effects of child care cost, mother's wage, and HH income on HH behavior relating to child care and mothers working outside home.Skill training and/or vouchers for workfare participants to give to prospective employers (18 month wage subsidy).Maternal decision to take job and decision to use out-of-home care are sensitive to child care price. Decrease in child care price increases number of mothers who work (and reduce poverty in some HH). Potential market wage of mother has positive effect on decision to purchase market care and engage in paid employment. HH non-wage income little effect on maternal employment and demand for child care.http://elibrary.worldbank.org/docserver/download/2400.pdf?expires=1371680951&id=...