The influence of local price and availability on parents’ choice of child care ELIZABETH E. DAVIS 1 & RACHEL CONNELLY 2 1 Department of Applied Economics, University of Minnesota, 317E Classroom Office Building, 1994 Buford Ave., St. Paul, Minnesota, USA; 2 Bowdoin College, Brunswick, Maine, USA Abstract. The striking variation in patterns of child care usage across states reflects differences in family characteristics, but may also reflect exogenous differences in local child care markets. Type of care selected will be influenced by the availability, cost, and accessibility of supply in the child care market as well as by family and child charac- teristics and cultural preferences. This study contributes to the growing literature on parental demand for child care by using a recent detailed data set from the state of Minnesota. We link household-level data on child care usage and family characteristics with county-level data on average provider rates and availability by type of care in order to estimate multinomial logit models analyzing the family, child, and market charac- teristics that predict type of care. Our analysis shows that using a relative or friend to care for a child is largely determined by availability, and choice of family care providers is most responsive to price for employed mothers. The types of care chosen by mothers who are not in the paid labor force differ substantially from the choices of employed mothers, and their use of center care is influenced by the prices of both center and family providers. Attitudes towards relative care are also shown to influence type of care chosen. Keywords: child care, employment of mothers, multinomial logit Introduction Recent studies reveal striking differences in patterns of child care usage across states. A report by the Urban Institute using data from the 1999 National Survey of America’s Families (NSAF) shows wide variation across 12 states in the percent of children in care, the types of care used, and the hours of care. The percentage of children under age 5 in center care ranges from 37% in Alabama to only 10% in Michigan (Sonenstein et al. 2002: 9). Differences in patterns of child care use across states certainly reflect differences in family characteris- tics (such as income), but may also reflect exogenous differences in local child care markets stemming from differences in zoning Population Research and Policy Review (2005) 24: 301–334 Ó Springer 2005 DOI 10.1007/s11113-005-8515-y