A Dynamic Analysis of the Effect of Child Care Costs on the Work Decisions of Low-Income Mothers with Infants

Child care costs reduce the net benefit of working and consequently influence mothers' decisions to work. They affect the employment of low-income mothers in particular because they represent a larger portion of these mothers' earnings. I used a hazard framework to examine a mother's decisions about work and hours of work after childbirth. I focused on low-income mothers with infants because they are the ones who may be most affected by child care costs. The results showed that child care costs are a barrier to work that is larger for low-income mothers than for non-low-income mothers. Further, child care costs have large negative effects on hours of work.