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The Value of Employer-Sponsored Child Care to Employees

Authors

  • Rachel Connelly,

    1. Department of Economics at Bowdoin College, Brunswick, Maine
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  • Deborah S. Degraff,

    1. Department of Economics at Bowdoin College, Brunswick, Maine
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  • Rachel A. Willis

    1. Department of American Studies at the University of North Carolina at Chapel Hill
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    • *

      From the Department of Economics at Bowdoin College, Brunswick, Maine, and the Department of American Studies at the University of North Carolina at Chapel Hill. E-mail: connelly@bowdoin.edu, ddegraff@bowdoin.edu, and rawillis@unc.edu. This research was supported by a grant from the W. E. Upjohn Institute for Employment Research. We also received support from the Bowdoin College Faculty Research Fund, Bowdoin's Department of Economics, and UNC's Center for Urban and Regional Studies. Thanks to Jean Kimmel, Brett O’Hara, and Rick Freeman for helpful comments and to Jen Blake and Shuli Ren for excellent research assistance. Many thanks are due to the employees and management of the three firms that donated their time to our data collection process.


Abstract

This article uses the contingent valuation method for calculating the value of employer-sponsored child care to employees. Like many environmental amenities, there may be a nonuse or existence value of working for a company that offers employer-sponsored child care (ESCC), as well as a use value to parents who have children in the center. We test this hypothesis using data from three firms, two of which have on-site child care. Our findings indicate that price is a determinant of willingness to pay for the continued existence or establishment of an on-site center. We find evidence of the existence value, even for employees without young children, and a greater valuation among recent hires than among longer-term employees.

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