Female labour participation and child care choices in Spain

This paper analyzes Spanish families' behaviour relating to child care and employment issues. It estimates a simultaneous equation econometric model to study the effect of child care costs on labour participation decisions and child care choices. Based on data from the Spanish Time Use Survey, our study indicates that female labour force participation is very elastic to changes in prices of day-care services. Also, choice of child care mode is conditional on employment status. In addition, the type of family or its socioeconomic situation, along with the prices of the different options influences in the chosen child care mode.