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The effect of universal child benefits on labour supply

Using a difference-in-differences estimator, I find the Canadian Universal Child Care Benefit has significant negative income effects on the labour supply of married individuals. The likelihood of lower-educated mothers to participate in the labour force is reduced 3.2 percentage points when receiving the benefit. Median hours worked per week among lower-educated mothers is reduced by 1.9 hours. The effects on higher-educated mothers are substantial, with median hours worked among higher-educated mothers reduced by nearly one hour per week. For men, the evidence suggests small but significant income effects on labour supply, consistent with the literature on labour supply elasticities. (author abstract)
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Reports & Papers

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