Partnered Women's labour supply and child care costs in Australia: Measurement error and the child care price

Abstract

We show that measurement error in the constructed price of child-care can explain why previous Australian studies have found partnered women's labour supply to be unresponsive to child-care prices. Through improved data and improved construction of the child-care price variable, we find child-care price elasticities that are statistically significant, negative and in line with elasticities found in other developed countries.