Response on Child Care and Leaves-BECKER

I am happy to see a variety of interesting comments. I can only give a few quick responses. Sweden was mentioned by many of the comments, and it is a very interesting case. Sweden has much more employment than other OECD countries relative to its high tax rates, in good part because it highly subsidizes paid leaves. I do not know if professional women take more or less leaves than other women, but women do take large scale advantage of the generous paid leave provisions, partly because ithey are paid out of social security funds rather than by their employers. I would predict that women who earn a lot relative to their mates, like some professional women, take less of the allowed leaves while their mates take more, but I do not know if that is true. The US has much more extensive opportunities for part time work than most other nations, especially France, Italy, and Germany. Sweden has a fairly large amount of part time work, but it mainly involves working for the government, whereas most part time work in the US is in the private sector. To a considerable extent, government part time work in Sweden involves some mothers caring for other mothers' children in government run child care centers. This seems like a very inefficient system, as convincingly argued by Rosen in the article I cited in my original entry. I certainly believe that government subsides for childcare and paid leaves do raise fertility, even though they are paid for by taxes. The reason is that these policies lower the cost of children, and also that families getting these subsidies have an increase in their income that is contingent on raising their fertility, while taxpayers have a reduction in income that is largely independent of their fertility. Economic analysis is convincing on this point. Much of the reduction in fertility has been caused by a substitution of the so-called (I called it this!) quality of children for quantity. If parental care had a large effect on the quality outcomes of their children, then there could be a case for encouraging care by parents. Paid leaves work in this direction, but government childcare facilities work in the opposite direction. And an alternative to paid leaves is a special tax on working women who have small children, or on families that divorce. These taxes would not be popular, and I do not support them. Still, they show that present policies of countries like Sweden have contradictory effects on the degree of parental care, and that there are many ways to induce more mothers or fathers to spend time caring for young children.

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