Childcare and Commitment within Households Paula Gobbi IRES, - PowerPoint PPT Presentation

Childcare and Commitment within Households Paula Gobbi IRES, Universit´ e catholique de Louvain Paris Seminar in Economic Demography

Introduction Theory Simulations Counterfactuals Conclusion Motivation and research questions Education (parents) → childcare → education (children) → human capital accumulation → growth Q1: How does the education of parents affect childcare? Q2: What type of marital decision process determines childcare?

Introduction Theory Simulations Counterfactuals Conclusion Data: ATUS+CPS 2003-2010 25-55 year old men (16,830) and women (19,314) who: live with their spouse (or unmarried partner) have at least one child under 18 in the household live with no other adult in the household Education Level Observations No Education to Grade 8 1,245 Grades 9 to 12, no diploma 1,763 High School Diploma, no college 8,524 Some College but no degree 5,879 Associate Degree, Occupational/Vocational or Academic Program 3,853 Bachelor’s Degree 9,641 Master’s Degree, Professional School and Doctorate Degree 5,239

Introduction Theory Simulations Counterfactuals Conclusion Childcare per child increases with education 00 60 00 50 00 1117 ef=1 1110 ef=2 40 00 1110 ef=3 1110 ef=4 00 1110 30 ef=5 1110 ef=6 00 1110 ef=7 20 00 00 10 7 0 0 0 0 0 0 1 2 3 4 5 6 7

Introduction Theory Simulations Counterfactuals Conclusion Male childcare relative to female’s increases with education 0.9 0.8 0.7 0.6 0.5 0.4 0.3 1 2 3 4 5 6 7

Introduction Theory Simulations Counterfactuals Conclusion Literature Facts linking childcare to education: Sayer, Bianchi and Robinson (2004), Guryan, Hurst and Kearney (2008) and Ramey and Ramey (2010) Marital decision models: Collective models: Chiappori (1988, 1992) ⇒ efficient allocation. Implicit assumtion: there is a credible commitment. Test of commitment: Mazzocco (2007) Non-cooperative models: Anderson and Baland (2002), Doepke and Tertilt (2012), Cigno(2012) On time allocation: Echevarria and Merlo (1999) , Iyigun (2005)

Introduction Theory Simulations Counterfactuals Conclusion Contribution Include corner solutions ⇒ important to explain the facts Non-cooperative decision model allows to replicate the observed relationship between education and childcare → Couples make inefficient choices on the amount of childcare provided: children would gain 70 minutes more of childcare if parents cooperated Reason: commitment matters! lack of commitment → non-cooperative choices → non-internalization of the positive externality of their choices on the couple’s utility → indeterminacy

Introduction Theory Simulations Counterfactuals Conclusion Setup Individual utility: ln c + µ ln l i + γ ln( qn ) Constraints: BC: c = w f e f L f + w m e m L m Quality of children: q = t f e α f + t m e α m + q Time: 1 = L i + ( t i + t i ) n + l i

Introduction Theory Simulations Counterfactuals Conclusion Cooperative couple Assumption: households commit to their choices max ln c + θµ ln l f + (1 − θ ) µ ln l m + γ ln( qn ) t i , L i s.t. 1 = L i + ( t i + t i ) n + l i , q = t f e α f + t m e α m + q , c = w f e f L f + w m e m L m , L i ≥ 0 and t i ≥ 0 . ⇒ 12 possible cases

Introduction Theory Simulations Counterfactuals Conclusion Cooperative couple: cases with respect to education e m e f

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative couple 1. Collective choice on labor supplies: labor contract ⇒ commitment. 2. Individual choice on childcare: no clause on childcare allocation in the marriage contract ⇒ no commitment.

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative couple: 2 steps 2. Cournot-Nash on childcare max ln c + µ ln l i + γ ln( qn ) t i L f and L m given ⇒ 4 cases Individuals do not internalize the positive externality of their choice on childcare on the utility of the couple 1. Collective decision on labor max ln c + θµ ln l f + (1 − θ ) µ ln l m + γ ln( qn ) L i given t i ( L i ) ⇒ 3 × 4 cases

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative couple: cases with respect to education e m e f

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative couple: t f , t m = 0 e m e f

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative couple: t f > 0 and t m = 0 e m e f

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative couple: t m > 0 and t f = 0 e m e f

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative couple e m e f

Introduction Theory Simulations Counterfactuals Conclusion Selection Criteria 1. Random choice of the equilibrium 2. Machist society 3. Feminist society

Introduction Theory Simulations Counterfactuals Conclusion Estimation Parameters a priori fixed: θ = 0 . 5, n = 2, w m = 1, w f = 0 . 9 Education: e i = exp 0 . 1 e 7 other parameters are estimated, for each model, with SMM � 2 � d − s ( p ) min d p s ( p ): draw 10 , 000 × 7 × 7 households → t f , t m → aggregate Optimization algorithms: PIKAIA and UOBYQA

Introduction Theory Simulations Counterfactuals Conclusion Estimated parameters Name of the Parameter (1) (2) (3) (4) p Mean of the lognormal distribution for q 1.593 0.257 1.688 1.182 q me S.E. of the lognormal distribution for q 2.808 0.240 1.089 2.662 q se Preference for leisure 0.832 1.189 0.371 1.599 µ Preference for child quality 3.349 1.559 1.082 3.397 γ Returns to parent education on childcare 1.089 1.019 1.287 0.473 α t f Fixed time providing childcare (female) 0.000 0.051 0.079 0.031 Fixed time providing childcare (male) 0.027 0.021 0.010 0.025 t m f Value of the objective function 4.718 1.026 3.438 2.258

Introduction Theory Simulations Counterfactuals Conclusion Cooperative model 90 60 tf tm 80 50 70 em=1 ef=1 40 em=2 ef=2 60 em=3 ef=3 50 em=4 ef=4 30 em=5 ef=5 40 em=6 ef=6 em=7 20 ef=7 30 20 10 1 2 3 4 5 6 7 1 2 3 4 5 6 7 ef em

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative model, random equilibrium 90 60 80 50 70 em=1 ef=1 em=2 ef=2 40 60 em=3 ef=3 em=4 ef=4 50 em=5 30 ef=5 em=6 ef=6 40 em=7 ef=7 20 30 20 10 1 2 3 4 5 6 7 1 2 3 4 5 6 7

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative model, machist society 90 60 80 50 70 em=1 ef=1 em=2 ef=2 40 60 em=3 ef=3 em=4 ef=4 50 em=5 30 ef=5 em=6 ef=6 40 em=7 ef=7 20 30 20 10 1 2 3 4 5 6 7 1 2 3 4 5 6 7

Introduction Theory Simulations Counterfactuals Conclusion Semi-cooperative model, feminist society 90 50 80 40 70 em=1 ef=1 em=2 ef=2 60 em=3 ef=3 30 em=4 ef=4 50 em=5 ef=5 em=6 ef=6 40 em=7 ef=7 20 30 20 10 1 2 3 4 5 6 7 1 2 3 4 5 6 7

Introduction Theory Simulations Counterfactuals Conclusion Gender gap in childcare 1.2 1.1 1 0.9 data 0.8 (1) 0.7 (2) 0.6 (3) (4) 0.5 0.4 0.3 0.2 1 2 3 4 5 6 7

Introduction Theory Simulations Counterfactuals Conclusion Efficiency 200 60 180 50 160 em=1 ef=1 140 em=2 ef=2 40 120 em=3 ef=3 em=4 ef=4 100 em=5 30 ef=5 80 em=6 ef=6 em=7 ef=7 60 20 40 20 10 1 2 3 4 5 6 7 1 2 3 4 5 6 7 If couples cooperated, children would receive in average 70 minutes more per day of childcare from their parents.

Introduction Theory Simulations Counterfactuals Conclusion Comparative statics: wage gap (cooperative model) What is the effect of closing the gender wage gap on childcare? 70 70 60 60 50 50 0.8 0.8 0.9 0.9 40 40 0.95 0.95 0.99 0.99 30 30 1.01 1.01 1.05 1.05 1.1 1.1 20 20 10 10 0 0 1 2 3 4 5 6 7 1 2 3 4 5 6 7

Introduction Theory Simulations Counterfactuals Conclusion Comparative statics: wage gap (semi-cooperative) 70 70 65 65 60 60 0.8 0.8 55 55 0.9 0.9 0.95 0.95 50 50 0.99 0.99 1.01 1.01 45 45 1.05 1.05 1.1 1.1 40 40 35 35 30 30 1 2 3 4 5 6 7 1 2 3 4 5 6 7

Introduction Theory Simulations Counterfactuals Conclusion Conclusion Looking at corner solutions is important Lack of commitment → non-cooperative choices on childcare Childcare decisions are inefficient: efficiency would increase the total amount of care supplied by 80%. Less efficiency but more equity among households?

Introduction Theory Simulations Counterfactuals Conclusion Further Research Complementarity in the production of child quality between parents Two steps non cooperative framework What is behind the theoretical heterogeneity generated by the semi-cooperative model?