Working Paper No. 221

Daycare Subsidies and Labor Supply in Sweden


This paper utilizes data from a Swedish household survey for 1984 (The HUS data) in combination with data on public daycare fees and spaces per child by community. We argue that the subsidy rate and availability of spaces determined by the political leaders of the community is to a large extent exogenous to the household. The joint out-of-home childcare and labor supply decision is analyzed by logit choice models. We find that the high quality public daycare in Sweden encourages labor market activity of women with preschoolers even when spouse's income is high and that when spaces are not rationed a lower price encourages use.

Integrating Immigrants into the Nordic Labour Markets

An Overall Perspective

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Denmark, Finland, Norway and Sweden face similar problems of integrating large groups of immigrants, especially low-educated ones from outside the EU, into their labour markets. In this volume, edited by Lars Calmfors, IFN, and Nora Sánchez Gassen in cooperation with researchers from across the Nordic Region analyse how labour market integration of immigrants can be promoted. 

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