This paper develops a structural model which links parental time use decisions to a child's development in a household with two parents and one child. Since the allocation of home time and market work has become more equally distributed within households during the latest decades and since fathers seem to be an increasingly important part of their children's daily life, this study, opposite to most other studies within the child care literature, explicitly takes both parents' time spent on child care into account as well as child care bought in the market. It is shown that the quality of market provided child care vs. the quality of parental child care is crucial for the parents' time use decisions but the availability of paternal child care does not seem to affect the mother's child care decision. The effect of parental child care time on children's educational outcome is tested using Danish time use data. Surprisingly, we find some negative correlations between parents' child care time and children's outcomes but controlling for family and background characteristics in probit estimations we find statistically significant positive association between mothers' child care time on weekdays and children's outcome as well as positive association between father's child care time on weekends and children's outcome. The mother's child care time seems to have greatest positive effect.
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Southern Economics Association Annual Meetings, 2007