Child care costs and lone mothers' employment rates: UK evidence

The most commonly cited explanations for the low employment rates of Britis h lone mothers are disincentives provided by the benefit system and a lack of suitable jobs or affordable child care. This is the first British study focusing on lone mothers' employment rates which includes direct measures o f child care costs. Using data from the 1989 Lone Parents Survey, we find s ignificant disincentive effects for child care costs, albeit of a smaller m agnitude than in some related studies. There are also some novel findings a bout knowledge of the benefit system, and measures of human capital and fin ancial stability and security.