Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. To identify the effect of the Swedish EITC-reform we instead exploit variation along two dimensions. First, the size of the tax credit is a function of the local tax rate. An individual who lives in a high tax municipality will ceteris paribus receive a higher tax credit compared to an individual who resides in a low tax municipality. Second, the absolute size of the tax credit -and even more importantly the tax credit as a share of the annual wage income -is a function of the wage income. A low-income individual 1 See Blundell (2006) and Eissa and Hoynes (2005) for overviews. 2 For people older than 64 a more generous tax credit applied. Terms of use: Documents in EconStor may 4will ceteris paribus receive a larger reduction in the average tax rate, which is the relevant tax rate when analyzing the participation margin.As the goal of the paper is to evaluate the effects of the EITC we perform the , we obtain a sizable and highly statistically significant semi-elasticity of 0.24.Since the validity of the triple-differences specification hinges on the assumption that the effect of the 'placebo treatment' should be 0, this estimate is worrying. Thus, even though we control in a flexible way for trends in employment growth in the main specification we still believe that there is a substantial upward bias in the obtained coefficient estimate. In addition, both the reform and the placebo estimates are sensitive to how we define employment. In sum, as the reform estimates typically are larger than the placebo estimates it cannot be ruled out that the EITC policy had a positive impact on employment, but the degree of uncertainty is large.We also show regression results from a subgroup analysis. A general pattern is that the placebo estimates are fairly close to (but typically smaller) than the reform estimates. However, the estimates changes in a non-systematic way when we use different definitions of employment, and we sometimes even find negative semielasticities. A major concern is therefore that there are trends present in the data that we fail to control for. To our knowledge, there is no other exogenous variation that can be 5 used to evaluate the Swedish EITC, and we come to the conclusion that it is not possible to evaluate the Swedish tax credit using quasi-experimental methods.The disposition of the rest of the rest of the paper is as follows: section 2 describes the Swedish tax system and, in particular, the earned income tax credit; section 3 discu...

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Childcare Costs and the Demand for ChildrenEvidence from a Nationwide Reform Terms of use: Documents in EconStor may AbstractExploiting the exogenous variation in childcare costs caused by a Swedish childcare reform, we are able to identify the causal effect of childcare costs on fertility in a context in which childcare enrollment is almost universal, user fees are low, and the labor force participation of mothers is very high. Anticipation of a reduction in childcare costs increased the number of first births, but only seemed to affect the timing of second births. We find a negative income effect for families with children already enrolled in child care.JEL-Code: H31, J13.