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ASU research casts doubt on subsidized child care as a way to boost birth rate

ASU economics professor says German policy move will cause births to decrease.
February 6, 2017

Economics professor's model predicts recently enacted policies in Germany won't boost employment, either

When the birth rate in Germany began falling in the 1990s, the country worried that producing fewer tax-paying workers could hurt the economy. That led to new policies to encourage families to have more children, including an expansion of subsidized child care.

New research by an Arizona State University professor, however, casts doubt on how effective these policies can be.

Alexander Bick, an assistant professor of economics in the W. P. Carey School of Business, created a model to evaluate the policies, based on a large German household data set to predict outcomes.

Bick looked at the two recent reforms. The first gave subsidized child-care slots to working mothers of children age 2 and younger, and the second expanded that to all young children, regardless of whether the mothers worked.

“I was curious to understand what we should expect of this reform. It’s a big reform that could potentially cost a lot of money, although it could be self-financing because if so many women go to work they are increasing productivity and paying taxes,” he said.

“The hope was this would boost mothers of young kids working and also have an impact on fertility in the sense that it will be easier combine work and life.”

His paper, titled “The Quantitative Role of Child Care for Female Labor Force Participation and Fertility,” was published in the Journal of the European Economic Association.

As it turns out, the predicted effects might be disappointing for policymakers. His model forecasts that subsidized child care might induce mothers who work part time to go to full time — and lead to a sizeable increase in women returning to the workforce. But the increase is not large enough to conclude that the lack of subsidized child care accounts for the low employment of German mothers with very young children, compared with mothers with older preschool children in GermanyThe birth rate in Germany was about 1.4 births per woman in 2010, compared with 1.6 in the European Union, 2 in the United States, and 2.5 worldwide in the same year. or compared with other European countries. Moreover, the policy falls short of the proclaimed goal to increase the fertility rate.

To create the life-cycle model, Bick used variables including number of children, labor force participation and various child-care choices. He estimated this model using data from the German Socioeconomic Panel, a longitudinal survey of about 11,000 households in the Federal Republic of Germany from 1984 to 2015.

“These models allow us to play around with the policies and evaluate their potential impact even before they have been put in place,” he said.

Bick’s model predicted that when subsidized child care was expanded, there was a “substitution effect,” as the working mothers were already using some other form of child care, like grandparents, so they could now use the subsidized child care.

“These women are already working, and this might make their life easier. What I found was these women started to work longer hours,” he said. “When people talk about policy reform, we have to see what choices people are already making that are limiting to some degree the effectiveness of these policies. Many mothers already choose to not work, and they still can use these policies for their older children. So why would you think you could incentivize those mothers to work when their children are of an even younger age?”

And because taxes are increased to finance the subsidized child care, the fertility rate actually decreased slightly, as households had to pay more taxes and therefore have less resources available. He said that in a few years, there likely will be enough data to determine the accuracy of the forecast on subsidized child care.

Bick intentionally did not focus on any developmental benefits of child care to children, sticking to participation and choice. His research focuses on workforce participation, and in another recent paper, he showed how differences in tax rates led to variations in women’s workforce hours across the U.S. and a large number of European countries.


Top photo: Alexander Bick, an assistant professor of economics in the W. P. Carey School of Business, created a model to forecast the outcomes of new child-care policies in Germany. Photo by Deanna Dent/ASU Now

Mary Beth Faller

reporter , ASU Now


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Rehab robotics field promises to return control, mobility to aging population

More than 300 rehab robotics researchers, clinicians and others gather at ASU.
Aging population drives interest in rehab robotics for its promise of mobility.
Rehabilitation robotics field covers a range of assistive therapies and devices.
February 7, 2017

Hundreds of researchers, clinicians and industry reps gather at ASU to discuss advancements in growing field

For many seniors and stroke victims, a trip to Disneyland with the little ones is physically out of reach. But Thomas Sugar, an ASU mechanical engineer who specializes in wearable technology, predicts that in the next five years, older people and others with mobility problems will be able to rent robotic exoskeletons that make dream vacations — as well as mundane tasks — a possibility.

“We’re on the cusp of making these technologies available and affordable for the general public,” Sugar said Tuesday. His ASU spin-out company, SpringActive Inc., aims to have a robotic prosthetic ankle in production for the general population within the next year.  

Sugar and more than 300 other rehab robotics researchers, clinicians and industry leaders gathered this week at ASU for the fifth annual Rehabilitation Robotics Conference.

Thomas Sugar
At the fifth annual Rehabilitative Robotics conference, researchers discussed advances in the field. Thomas Sugar (left), an ASU mechanical engineer, predicts that in the next five years the public will have access to wearable robotics. Neville Hogan, meanwhile, predicts widespread clinical acceptance in the near future. Photo by Jessica Hochreiter/ASU

There has been increased interest in the rehab robotics — driven by an aging population dealing with the aftermath of debilitating health problems — based on the promise of restored physical movement and control. Most rehab robotic therapies originated to help military veterans, but the next generation will seek to serve the general public.

The field covers a range of assistive therapies and devices, including exoskeletons that support walking and lifting, treadmill-like robots that help stroke survivors use their arms and legs, and prosthetics that allow users to sense space and dimension.

“The conference provides our junior investigators with an unprecedented opportunity to hear about three decades of research from the people who created the field,” said Marco Santello, a neurophysiologist and director of the School of Biological Health Sciences. “We have collected research on neuroplasticity, locomotion dynamics and a myriad of other body-machine interfaces. The next phase will bring a new generation of rehabilitative technologies.”

Widespread clinical acceptance of rehabilitation robotics is the most significant change we’ll see in the next decade, said Neville Hogan, a mechanical engineering professor at the Massachusetts Institute of Technology, who spoke at the conference. 

Tech-savvy therapists recognize the value of assistive robotics and see the standardized data collection they afford as a major benefit, Hogan said.

“It’s far less subjective than the clipboard methods of the past, and enhances our ability to tailor therapy to individual patients,” he said.

Dario Farina, chair of neurorehabilitation engineering at the Imperial College of London’s Department of Bioengineering, also presented at the workshop.

His research has enabled the simultaneous processing of hundreds of motor neurons — the signals the brain sends to muscles — without invasive procedures.  The breakthrough has challenged classic views on the neural activity that drives steadiness in the performance of precise tasks and is expected to result in prosthetic devices that give patients unprecedented levels of fine motor control. 

“In the near future, it will be possible to fully decode the neural information sent from the spinal cord and build man-machine interfaces for the natural and dexterous control of bionic limbs,” Farina said, explaining that patients will be able to control prosthetic devices with the same, automatic mental commands used to control their natural hands.

Because health problems affect patients differently, fine-tuning rehab therapies is the next focus for Panagiotis Artemiadis, an ASU mechanical engineer whose research includes mechatronics and human-robot interaction.

“In the next five years,” he said, “we’ll be able to adjust robotics to be patient specific.”


Top photo: At the fifth annual Rehabilitation Robotics Conference, Denise Oswalt demonstrates a virtual reality application from the lab of Bradley Greger, an ASU researcher who specializes in neural engineering. Photo by Jessica Hochreiter/ASU

Terry Grant

Media Relations Officer , Media Relations and Strategic Communications