Child care costs on labor force participation rate of women

Assignment Help Business Economics

Reference no: EM13898387

The presence of pre-school children often complicates women’s labor supply decisions by forcing them to consider the costs of child care. In this problem, you are asked to consider the labor supply decision of a single mother with one child of pre-school age.

1. Show (graphically) how the woman’s labor supply decisions are affected by child care costs. (Hint: For every hour that a woman is working and hence cannot look after her child, she must purchase an hour of child care services in the market, at price c). What is the effect of child care costs on the labor force participation rate of women with young children?

2. The government is considering two proposals designed to assist women in covering the costs of child care:

Proposal A: A subsidy equal to some fraction of a household’s total child care expenses.

Proposal B: A per-child subsidy to households for each child of pre-school age.

If the government wishes to increase the labor supply and labor force participation of single mothers, which of these two policies would you recommend and why?

Reference no: EM13898387

Questions Cloud

Several causes of economic inefficiency in medical care : Economists claim that there are several causes of economic inefficiency in medical care. List three basic causes and, for each, describe why it results in economic inefficiency and poor performance in medical markets.

Suppose the market for lemonade is a competitive market : Suppose the market for lemonade is a competitive market. The prevailing market price is $10. A typical seller in the market has a cost function of: C = q3 - 6q2 + l0q + 100. Find its profit-maximizing output level. Calculate her profit.

Internet-online shopping would affect menu costs inflation : Why might you expect individuals who were unemployed in their 20s to have lower wages at the age of 40 than individuals with identical educational backgrounds but who were not unemployed? How do you think the internet and online shopping would affect..

Analyze the politicians statement using economic theory : Suppose that it is well known that many children work in low-skill jobs in poor country “X.” If rich country “Y” buys goods from poor country “X,” then the increase in demand for their products is large enough to raise the wages of all low-skill work..

Child care costs on labor force participation rate of women : The presence of pre-school children often complicates women’s labor supply decisions by forcing them to consider the costs of child care. In this problem, you are asked to consider the labor supply decision of a single mother with one child of pre-sc..

Two-part tariffs valid-ethical economic strategies : Why or why not? More generally, are pricing strategies such as odd pricing, price discrimination, cost-plus pricing, and two-part tariffs valid, ethical economic strategies? Why or why not?

Assets rather than undertake green field investments : "Firms prefer to acquire existing assets rather than undertake green field investments while contemplating FDI." Explain the reasons that support this argument.

Challenge merger according to horizontal merger guidelines : Suppose Fiat recently entered into an Agreement and Plan of Merger with Case for $4.3 billion. Prior to the merger, the market for four-wheel-drive tractors consisted of five firms. Based only on this information, is the Justice Department likely to..

What conditions might it return to the banking system : Where do you think the rest of the monetary base is (from money supply), and under what conditions might it return to the banking system?

User Account

All Pages