Do downward private transfers enhance maternal labor supply? Evidence from around Europe

Using data on 2,317 mother-daughter pairs from 10 European countries, we investigate the impact of downward time and monetary transfers on the career choices of transfer-receiving young mothers. For Europe as a whole, we find a strong positive effect of grandchild care on the labor force participation and the degree of labor market involvement of the young mother, but no impact of monetary transfers on either of these decisions. Both recipients and donors with better endowments are more likely to participate in a monetary transaction, while mothers with lower level of human capital are more likely to provide time transfers to their better endowed daughters. © 2010 Springer-Verlag.