Empirical studies on family economics

Abstract

This thesis studies how family policies affect families’ childcare choices and how childbirth affects the gender wage gap. All four articles in this thesis use unit-level register data from Statistics Finland and the Social Insurance Institution of Finland. Econometric methods are applied to study the causal effects of family policies and childbirth on labor market outcomes.

The first article studies the dynamic and heterogeneous effects of family policy on mothers’ employment re-entry after childbirth. The methodology in this article combines a hazard model with time-varying covariates and regional variation in the level of the home care allowance. The results show that family policy affects families’ choices both dynamically (the effect of higher allowances diminishes over time) and heterogeneously (the magnitude of the effect varies according to mothers’ background characteristics).

The second article studies how private early education and care subsidies affect families’ choices when the option of high-quality subsidized universal public daycare is available. Regional variation in both private day care and home care allowances is used as an exogenous variation to identify causal effects. The results show that higher subsidies increase take-up but have no causal impact on home care or the employment rate of women with small children. Instead, private services crowd out public childcare.

The third and fourth articles study child penalty – that is, how childbirth affects earnings. Third article shows that a longer-than-average childcare leave results in a greater child penalty. However, at the workplace level, a shorter-than-average childcare leave results in relatively small rewards. The fourth article uses a novel instrument (success of the first medically induced ovulation treatment) to identify the causal effects of fertility on labor earnings. The results highlight the mechanisms behind the wage gap caused by the birth of the first child. Women lose labor earnings by working shorter hours, less overtime, and fewer irregular hours when their children are small.

Read the full publication (helda.helsinki.fi).

Author

Tapio Räsänen

More about the publication

• Peer-reviewed: yes.
• Open access: yes.

• Full reference: Räsänen, T. (2023). Empirical studies on family economics [väitöskirja, Unversity of Jyväskylä]. Helda. http://urn.fi/URN:NBN:fi-fe2023053049502