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The New National Quality Framework: Quantifying Some of the Effects on Labour Supply, Child Care Demand and Household Finances for Two‐Parent Households
Author(s) -
Breunig Robert V.,
Gong Xiaodong,
Trott Declan
Publication year - 2014
Publication title -
economic record
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.365
H-Index - 42
eISSN - 1475-4932
pISSN - 0013-0249
DOI - 10.1111/1475-4932.12059
Subject(s) - labour supply , child care , government (linguistics) , quality (philosophy) , household income , economics , demographic economics , labour economics , point (geometry) , child labour , low income , business , work (physics) , medicine , geography , nursing , mechanical engineering , linguistics , philosophy , geometry , mathematics , archaeology , epistemology , engineering
New regulations to improve the quality of early childhood education and care came into force in Australia in 2012. Using a simultaneous, structural model of labour supply and child care demand we predict the effects on the labour supply of partnered women, on demand for child care and on household finances for two‐parent households in Australia. Using estimated cost impacts of this new National Quality Framework from government and non‐government sources, we find modest effects on household behaviour. For a mid‐range cost scenario, we find that partnered women's labour force participation will decrease by just over one‐half of one percentage point, a change of less than 1 per cent. Working hours for partnered women decrease by 20 minutes or approximately 2 per cent. Household disposable income decreases by $12.50, a 0.6 per cent decrease. Given widespread agreement about the benefits of investing in children, these quantitatively small effects for two‐parent households strengthen the case for the National Quality Framework.