Abstract

It is well established that there is a link between rising childcare costs and the low rates of fertility and stagnating levels of female labor force participation occurring in the United States. This study aims to evaluate these relationships as well as determine how the United States could incentivize higher rates of fertility and women employment. Specifically, it investigates whether an increase in a childcare subsidy has an impact on fertility rates and female labor force participation. The theory in this study develops two utility maximizing models for a household: one regarding fertility and the other regarding female labor force participation. These models are with respect to both the monetary cost and time cost that come with having children, and how differences in these costs can affect decisions of a household. I model this by reviewing empirical articles regarding fertility and female employment with respect to childcare costs both within the U.S and abroad. Lastly, to test this hypothesis, this study used a difference-in-differences approach using changes in Maryland’s Childcare Subsidy Program to determine its effects on fertility rates and female labor force participation rates. The results found no supporting evidence due to lack of statistically significant results, but offers an avenue for future work and direction for additional new research.

Advisor

Long, Melanie

Department

Business Economics

Disciplines

International and Comparative Labor Relations

Publication Date

2021

Degree Granted

Bachelor of Arts

Document Type

Senior Independent Study Thesis

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