Discussion paper

DP4357 Part-Time Employment Traps and Childcare Policy

We model educational investment, wages and employment status (full-time, part-time or non-participation) in a frictional world in which heterogeneous workers have different productivities, both at home and in the workplace. We investigate the degree to which there might be under-employment and distortions in human capital investment, and we then show how childcare policy can be used not only to correct the ex post under-participation problem but also to provide efficient incentives to invest optimally ex ante in education.


Booth, A and M Coles (eds) (2004), “DP4357 Part-Time Employment Traps and Childcare Policy”, CEPR Press Discussion Paper No. 4357. https://cepr.org/publications/dp4357