Cash-for-Care, Labor Force Participation and Marriage

Jennifer Holland, University of Wisconsin at Madison

This study considers how within-couple economic dependency affects marital behavior. In 1998, the Norwegian government introduced a Cash-for-Care benefit scheme to reimburse parents of one- and two-year-old children for the cost of private care or providing childcare in the home. The program disproportionally encouraged home-based care, thereby incentivizing increased within-couple dependency and potentially making union formalization through marriage more desirable. Results suggest that the program increased the tempo but not the quantum of marriage: despite an overall trend toward later marriage, parents of one-year-old children who claimed the benefit were more likely than non-beneficiaries to marry, while beneficiary parents of two-year-old children were less likely to marry. This increased pace of marriage mirrors an increased pace of childbearing among Cash-for-Care beneficiaries, suggesting that marriage may be a marker of particular stages in the family life-course rather than an institution of economic security.