We model choices between caring for an infant at home or through some market provision of child care. Maternal labor supply necessitates child care purchased in the market. Households are distinguished along three dimensions: (i) Exogenous income, (ii) the wage rate of the primary care giver and...

We analyse a model in which families may either be “traditional” single-earner with caring for the child at home or “modern” double-earner households using market child care. Family policies may favour either the one or the other group, like market care subsidies vs. cash for care....

In a model with endogenous fertility and labor supply three instruments of family policies are analyzed: child benefits, subsidies for external child care, and parental leave payments. We compare the impact on the quantity and quality of children, the secondary earner's labor supply and welfare....

The relationship between government and parents is modelled as a principal-agent problem, with the former in the role of principal and the latter in the role of agents. We make three major points. The first is that, if the well-being of the child depends not only on luck, but also on parental...

We formalize and estimate the dynamic marginal efficiency cost of redistribution (MECR) in the spirit of Okun’s “leaky bucket”. We analyze the MECR of an income-contingent childcare subsidy program and the income tax within the German context, using a dynamic structural...

We formalize and estimate the dynamic marginal efficiency cost of redistribution (MECR) in the spirit of Okun’s “leaky bucket” to compare the MECR of an income-contingent childcare subsidy program and of the income-contingent tax and transfer schedule. We set up a dynamic structural model...

This paper examines the causal effects of a major change in the German parental leave benefits on fertility. I use the unanticipated reform of 2007 to assess how a move from a means-tested to an earnings-related benefit affects higher-order births. By using data from the Mikrozensus, I find that...

We investigate public preferences for equity-enhancing policies in access to early child care, using a survey experiment with a representative sample of the German population (n ≈ 4,800). We observe strong misperceptions about migrant-native inequalities in early child care that vary by...

What role does affordable and widely available public child care play for fertility? We exploit a major German reform generating large temporal and spatial variation in child care coverage for children under the age of three. Our precise and robust estimates on birth register data reveal that...