Purpose
In the period 2001 to 2003, the municipal structural reform on childcare was implemented in Sweden. The reform was called ’Maksimal takst og almen førskole m.m.’ (maximum price and general preschool, etc.). The objective of this study is to evaluate the part of the reform that concerns the highest price (the maximum price) for daycare centres and programmes for schoolchildren by investigating whether the maximum price leads to more parents working, and to investigate whether the maximum price affects the number of hours parents choose to work. In the ‘maximum price’, the rate is fixed on the basis of a specific maximum percentage of a household’s gross income and the rate cannot exceed a set ceiling. One of the political motives for setting a limit for childcare rates is to create greater incentives for parents to work.
Result
The study shows that in households where the price of childcare fell by SEK 500 or more per month, 3% of mothers were more likely to be active in the labour market than in other households. No effect on the level of fathers’ participation in the labour market was detected. Furthermore the study shows that reducing the price of childcare has no effect on the number of hours parents who already work choose to work.
Design
Questionnaires were sent to 70,000 parents, of whom approximately 60,000 responded. In addition to this, data about 41,244 persons were retrieved from the LINDA database (longitudinal database of individuals).
References
Mörk, E.; Lindqvist, L.; Lundin, D.(2006). Påverkar maxtaxan inom barnomsorgen hur mycket föräldrar arbetar? Uppsala: Institutet för arbetsmarknadspolitisk utvärdering (IFAU).
Financed by
The government has requested that the Swedish Skolverket assess the reform. IFAU (the Institute for Labour Market Policy Evaluation) is responsible for carrying out the assessment.