The goal of the proposed research is to provide a comprehensive analysis of the interrelations among child care demand, labor supply, and fertility in families with young children. To accomplish this goal, the Youth cohort of the National Longitudinal Survey (NLS-Y) for the years 1982 through 1986 will be used. The NLS-Y contains perhaps the most comprehensive information available at the household level on utilization of child-care by families with young children. The child-care data will be used together with labor supply and fertility information from the NLS-Y over the same five-year period. Some of the important issues to be addressed in the study include the following: (1) How does the cost of child care affect labor supply decisions of mothers of young children and other family members, both at a given time and over time? (2) How does the cost of child care affect the timing of births? (3) How does the cost of child care affect the quality of child care purchased in the market and the demand for market versus informal (nonmarket) care? (4) What are the determinants of the cost of child care? (5) How stable are child-care arrangements and do changes in child-care arrangements reflect dissatisfaction with current arrangements or changes in the circumstances surrounding employment? (6) How does the myriad of available child-care subsidies affect fertility, employment, and child-care decisions and what factors determine whether a family chooses to receive a particular type of subsidy? Answers to these and related questions are important both for contributing to a general understanding of the determinants of crucial aspects of family behavior and for an understanding of the possible behavioral effects induced by government policies. A variety of statistical procedures will be employed in the analysis, to exploit the panel feature of the data. These include discrete time hazard rate models, tobit models, and Poisson regression models.
