CHILD-CARE SERVICES AND THE URBAN LABOR-MARKET .1. THE URBAN CHILD-CARE MARKET

In this two-part paper we examine some of the market characteristics o f urban child-care services. Part 1 is concerned with theory. In it we review the contemporary child-care and preschool education service is sue; consider questions of market efficiency and equity, and formulate these in a general equilibrium model which generates testable househo ld labour-supply and service-supply functions. In part 2 we report on an empirical study in which aggregate versions of these functions are calibrated for the supply of labour from mothers with young children a nd for the supply of childminding services. We focus on the childminde r sector, which is of interest as a personal social service that has t raditionally been left to the private sector and as a private service with relatively easy entry and exit. These models yield interesting re sults which indicate on the one hand that access to child-care service s is a binding constraint on female labour-market participation and on the other, that the supply of child-care services is quite unresponsi ve to demand.