The Effectiveness of Child Care Benefit at Improving Returns to Work for Women

The costs of child care can substantially reduce the returns to work for families with children. This is especially important for women, who often have a weaker attachment to the labour force than men. Subsidies for child care, such as the federal government's Child Care Benefit, help to offset the cost of child care and boost the financial benefits of paid work by women. In this paper, I examine how effective Child Care Benefit is at improving the returns to work for women with young children. I compare the effectiveness of Child Care Benefit for lone and partnered mothers with different levels of income and numbers of children using STINMOD, NATSEM's static microsimulation model of the income tax and social security systems.