An Econometric Analysis of the Effects of the Expanded UCCB on Women's Labour Supply

Abstract

This paper mainly investigates the average marginal effects of the expansion of the Universal Child Care Benefit (UCCB) on the labour supply decisions of Canadian women whose youngest child is aged between 6 and 17, usin'g the Labour Force Survey Public Use files for the time periods January to June 2014 and January to June 2015. I apply the difference-in­ differences method to estimate probit models by education level for the full sample and for samples of childless women and women with children respectively. I find a positive marginal effects of the UCCB on women's labour supply that is significant at least the 10% level for highly educated women, in both samples. However, the average marginal effect of the expansion of the UCCB on the likelihood of being employed is negative and statistically significant for women with a lower education level. The results also show economically and statistically significant average marginal effects of other characteristics on women's labour supply decisions.