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Parental work and child-care in Canadian families

In 2000, 79 percent of married Canadian women between the ages of 25 and 44 were in
the labour force and 75 percent were employed.1 Many Canadian families with working parents
use costly child-care, and many of these families take advantage of the child-care expense
deduction (CCED): in 1998, 71 percent of families with pre-school children used child-care
services to work or study at a given point in time,2 and 868,460 taxfilers reported nearly $2.4
billion in child-care expenditures on 1,390,200 children.3 In this thesis, I examine the effects of
parental labour supply and child-care use on children, the impacts that child-care costs have on
the labour supply of married mothers, and the fairness of the tax system with respect to child-care
costs.
Chapters I, and V are introductory and concluding chapters, respectively.
In chapter II, I consider the question of whether parental labour supply and child-care use
affect child cognitive and behavioural outcomes. Parental labour supply reduces the amount of
time parents have for their children. On the other hand, parents can replace their own time with
child-care services and can also purchase more market goods with additional income earned at
work. I examine this question using the first three cycles of the National Longitudinal Survey of
Children and Youth (NLSCY), which provide both a large sample size and a rich source of data,
including controls for parenting skills. The possible joint detennination of labour supply and
child outcomes is also tested.
In chapter III, I estimate the impact of child-care costs on the return to work of married
Canadian women with children under three, using data from the 1988 Canadian National Childcare
Survey (CNCCS) and Labour Market Activity Survey (LMAS). Data from the 1995
Canadian General Social Survey indicate that Canadian mothers have split views on the issue of

whether parental labour supply has deleterious effects on child outcomes. Furthermore, women's
views on these issues tend to be consistent with their labour supply, suggesting their views may
affect whether they choose to work or not. If women's preferences for work are based on thenviews
and are correlated with other explanatory variables such as education and cost of care, the
estimated coefficients on these explanatory variables will be biased. In order to allow for these
potential differences in responsiveness to childcare costs, I estimate separate models where
current or previous occupation and weeks worked in the previous 12 months are used as control
variables in the estimation to account for heterogeneity of preferences.
In chapter IV of the thesis, I use data from the CNCCS and LMAS to examine the
vertical and horizontal equity of the CCED. Vertical equity is evaluated by comparing CCED
benefit rates for different family levels of earnings. This is done for dual earner families with
childcare costs and similar characteristics. Horizontal equity is examined by investigating
whether the existence of the CCED increases or decreases the difference between effective tax
rates of families with similar earnings but different labour supplies. I use measures of actual and
potential earnings to evaluate both vertical and horizontal equity.

Identiferoai:union.ndltd.org:LACETR/oai:collectionscanada.gc.ca:BVAU.2429/12983
Date05 1900
CreatorsGagne, Lynda Giselle
Source SetsLibrary and Archives Canada ETDs Repository / Centre d'archives des thèses électroniques de Bibliothèque et Archives Canada
LanguageEnglish
Detected LanguageEnglish
TypeElectronic Thesis or Dissertation
RelationUBC Retrospective Theses Digitization Project [http://www.library.ubc.ca/archives/retro_theses/]

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