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Barigozzi, Francesca
, Cremer, Helmuth and Roeder, Kerstin
(2019)
Having it all, for all: child-care subsidies and income distribution reconciled.
TSE Working Paper, n. 19-1005, Toulouse
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Abstract
This paper studies the design of child-care policies when redistribution matters.
Traditional mothers provide some informal child care, whereas career mothers purchase full time formal care in the market. The sorting of women across career paths is endogenous and shaped by a social norm about gender roles in the family. Via this social norm traditional mothersinformal child care imposes an externality on career mothers, so that the market outcome is inefficient. Informal care is too large and the group of career mothers is too small so that inefficiency and gender inequality go hand in hand. In a first-best, full information word redistribution across couples and efficiency are separable. Redistribution is performed via lump-sum transfers and taxes which are designed to equalize utilities across all couples. The efficient allocation of child care is obtained by subsidizing formal care at a Pigouvian rate.
However, in a second-best settings, we show that a trade-off between the reduction of gender inequality and redistributive considerations emerge. The optimal uniform subsidy is lower than the Pigouvianlevel. Under a nonlinear policy the first-best Pigouvianrule for the (marginal) subsidy on informal care is reestablished. While the share of high career mothers continues to be distorted downward for incentive reasons, this policy is effective in reconciling the objectives of reducing the child care related gender inequalities and achieving a more equal income distribution across couples.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | April 2019 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Child care, womens career choices, child care subsidies, redistribution, social norms |
| JEL Classification: | D13 - Household Production and Intrahousehold Allocation H23 - Externalities; Redistributive Effects; Environmental Taxes and Subsidies J16 - Economics of Gender; Non-labor Discrimination J22 - Time Allocation and Labor Supply |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 16 Apr 2019 12:31 |
| Last Modified: | 02 Apr 2021 16:01 |
| OAI Identifier: | oai:tse-fr.eu:122917 |
| URI: | https://publications.ut-capitole.fr/id/eprint/32349 |
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- Having it all, for all: child-care subsidies and income distribution reconciled. (deposited 16 Apr 2019 12:31) [Currently Displayed]
