A discrete choice model for labor supply and childcare

A discrete choice model for labor supply and childcare for mothers of preschoolers is presented. The mothers are assumed to make choices from a finite set of job possibilities and from a finite set of childcare options. Options in the markets for childcare are characterized by opening hours, fees and quality attributes. Similarly, jobs are characterized by a fixed wage rate, working hours and a number of variables related to job satisfaction. In the estimation of the model, we take into account that the number of options available might vary across work/care combinations and that some mothers are rationed in the market for care at day care centers. The model is employed to simulate the female labor supply effects of the Norwegian home care allowance reform.