Suppose the government were to provide a $2 per hour subsidy for families who pu

ID: 1169052 • Letter: S

Question

Suppose the government were to provide a $2 per hour subsidy for families who purchases child care, regardless of work or wage status. This will..

A. Increase female labor force participation as take home pay for women will increase

B. Have an ambiguous effect on the number of hours worked because the income and substitution effects work in opposite directions

C. An increase in labor force participation for women, causing women, who were not working before, to enter the labor force

D. A decrease in labor force participation rates for women, including a decrease in number of hours worked for those who are working

Both A And C

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