Seminar: "Do mothers increase their labor supply when children go to school?"

When children start going to school, parents save money or time or both and this can affect their labor supply. For parents who do not work fulltime, labor supply is expected to increase when their youngest child starts school, as they spend less time caring for their children. At the same time, the labor supply of working parents may decrease because they spend less money on child care. In this paper, we examine the trade-off between leisure, work and childcare when children start school. We derive predictions using a stylized model of the labor supply of mothers. Using detailed administrative data on all parents from the Netherlands, where children start school (kindergarten) for approximately 20 hours a week when they turn 4 years old, we show that mothers’ labor supply increases by 2 to 3% when their youngest child starts going to school. The effect of additional time dominates the income effect.