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Child care costs, household liquidity constraints, and gender inequality

Casarico, Alessandra, Del Rey, Elena, Silva Becerra, Jose I. (2023) Child care costs, household liquidity constraints, and gender inequality. Journal of Population Economics, 36 (3). pp. 1461-1487. ISSN 1432-1475. (doi:10.1007/s00148-023-00936-2) (KAR id:101366)

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In a model with endogenous female labour supply and wages, we show that liquidity constraints that prevent households from buying child care generate an inefficiency and amplify gender gaps in the labour market. We evaluate the relative merits of paid maternity leave, child care subsidies, and government loans in mitigating liquidity constraints and promoting gender equality. While an extension in the duration of the leave has ambiguous effects, child care subsidies and loans in the form of child care vouchers remove the liquidity constraints and reduce gender gaps in participation and wages. We illustrate the mechanisms at play in a numerical example using Spanish data.

Item Type: Article
DOI/Identification number: 10.1007/s00148-023-00936-2
Additional information: Pubrouter update. Emailed author on ticket T2305-12650 23/05/2023 EH
Uncontrolled keywords: Gender wage and participation gaps, J18, J16, Liquidity constraints, Statistical discrimination, J13, Numerical example
Subjects: H Social Sciences > HB Economic Theory
H Social Sciences > HC Economic History and Conditions
Divisions: Divisions > Division of Human and Social Sciences > School of Economics
Funders: Ministerio de Ciencia e Innovación (
SWORD Depositor: JISC Publications Router
Depositing User: JISC Publications Router
Date Deposited: 23 May 2023 13:25 UTC
Last Modified: 24 May 2023 13:49 UTC
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Casarico, Alessandra:
Del Rey, Elena:
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