The Effect of the Child Cash Benefits on Female Labour Supply in OECD Countries

Abstract

This paper investigates the impact of child cash benefits on the female labour supply in OECD countries. The analysis covers the 2000–2015 period and 30 countries. Using panel regression analysis, the study found that the effect of child benefits on the labour force participation rate depends on the age of women and the share of benefits in GDP. A relatively high share (above the group average) negatively affected the labour supply of women aged 25–34, while a relatively low share (below the group average) contributed to an increased supply of such labour. The study also found that the length of paid maternity and parental leave available to mothers and public spending on services for families with children had a positive effect on the labour supply of women aged 25–34.

Keywords

• family policy
• cash transfers
• labour force participation rate