Maternal Employment: The Impact of Triple Rationing in Childcare in Flanders

Abstract

This paper analyses how maternal labor supply responds to the price and availability of childcare services. It focuses in particular on the childcare market of Flanders, which is characterised by above average childcare use, a wide variety of price schemes and suppliers, and strong government supervision regarding quality.Variation in prices and the degree of rationing of three types of childcare services at the municipal level are used to identify mothers' labor supply responses. A discrete labor supply model of the Van Soest (1995) type is elaborated to allow for heterogeneity in prices and to distinguish between rationed and non-rationed households.These extensions rest on rationing probabilities that are estimated separately for informal childcare, formal subsidised childcare and formal non-subsidised childcare using partial observability models (Poirier,1980).The estimates confirm earlier findings for Germany and Italy, indicating only small price effects and relatively large supply effects. This shows that labor supply incentives of expansion of childcare services are also present in a country which has surpassed the EU target of childcare slots for 33% of children below the age of 3 (Belgium, in contrast with Germany and Italy). Moreover, budgetary simulations suggest the expansion to be beneficial to the exchequer. Rising tax and social security benefits following the increase in labor supply largely exceed the costs of expansion.

Local Childcare Availability and Dual-Earner Fertility: Variation in Childcare Coverage and Birth Hazards Over Place and Time

“…However, competition leads private childcare providers to adopt the maximum price among subsidized childcare (Farfan-Portet et al 2011;Vandenbroeck 2006). In addition to direct subsidies to childcare providers, Belgium also provides tax deductions for childcare expenses 1 (Farfan-Portet et al 2011;ONE 2018;Vandelannoote et al 2013). A 2009 report for the Flemish region indicates that only 16.5% of parents not using formal childcare claim that the cost is one of the reasons (Hedebouw and Peetermans 2009).…”

“…First, Belgium is characterized by a long history of reconciliation policies and is, alongside France and Scandinavian countries, regarded as a context in which work and family are relatively compatible (Gornick et al 1997;Klüsener et al 2013;Matysiak and Węziak-Białowolska 2016;Neyer 2003). Since the 1970s formal childcare has been continuously extended and as of the early 2000s, Belgium is included in a short list of countries that meet the Barcelona target of 33% childcare enrolment for children aged 0-3 (Farfan-Portet et al 2011;Morel 2007;Plantenga et al 2013;Population Council 2006;Vandelannoote et al 2013). Second, a lack of effects of childcare coverage on fertility in previous studies for West Germany and Sweden is, respectively, interpreted as a result of the overall inflexibility of the West-German childcare system (Hank and Kreyenfeld 2003) and the general sufficiency of childcare provisions in Sweden (Andersson et al 2003).…”

“…Hence, previous research suggests that research on regional childcare availability and fertility requires countries with meaningful variation in the local supply of childcare. Belgium is such a country as childcare availability and shortages vary considerably between regions, and the availability of local childcare places exhibits considerable increases during the early 2000s in line with explicit policy targets (Hedebouw and Peetermans 2009;Kind andGezin 2000-2003;Plantenga et al 2013;Vande Gaer et al 2013;Vandelannoote et al 2013).…”

Full Childcare Coverage: Higher Maternal Labour Supply and Childcare Usage?

“…Not finding childcare might have important consequences for the parental labour supply decision as these households stop working or reduce the amount of hours worked. There is evidence that households face availability restrictions in all three types of childcare, as suggested by Vandelannoote et al (2013).…”

EUROMOD: the European Union tax-benefit microsimulation model

“…Moreover, a standardised approach of defining and naming the variables (both in input and output EUROMD data, see Sutherland et al, 2008) enables the user to recognise similar taxbenefit components across countries and facilitates the possibility to adapt different data sources as EUROMOD input data (see Dal Bianco and Zantomio (2013) on the development of harmonized gross and net income measures in SHARE data by using EUROMOD or Vandelannoote et al (2013) who adapt the Flemish Families and Care Survey for a specific analysis focusing on the responsiveness of labour supply to different childcare arrangements).…”