| Abstract |
This paper studies the impact of auxiliary benefits–spousal and survivors benefits– on the labor supply of married mothers. I then develop a computable overlapping generations model with heterogeneous households, including couples and singles, in a general equilibrium framework. A key feature of my model is that couples and single females differ exogenously regarding the number of children and must pay childcare costs if they work. Additionally, child-related transfers and auxiliary benefits are embedded. The simulation results suggest twofold. First, the elimination of auxiliary benefits encourages a more significant fraction of married mothers to work than married females without children. Second, the impact of auxiliary benefits remains salient even though American Family Plan is implemented, which affects households' welfare. |