The goal of the proposed research project is to gain an understanding of the role of government subsidies to child care in explaining recent changes in fertility and employment patterns in the United States. To accomplish this goal, a theoretical and empirical analysis of the dynamic effects of market child care costs on fertility, labor force participation, and child care use will be carried out. The analysis will be based on a hazard rate model approach and will be estimated using continuous time longitudinal labor force data and birth histories. Three features of the proposed analysis represent advances over previous studies in this area: (1) The joint analysis of the effects of child care costs on fertility, labor supply, and child care use proposed here has not been undertaken before, and is important for an understanding of the full consequences of government subsidies to child care; (2) The dynamic, hazard rate approach to studying fertility and labor supply decisions proposed here intergrates previous separate dynamic analyses of fertility and labor supply and represents the first attempt to trace the impact of child care costs on the timing of fertility and labor force participation decisions; (3) The measures of child care costs to be used in the proposed study include both site-specific average costs for different types of child care and measures of subsidy rates provided under a variety of government programs. These cost measures are more comprehensive than those used in previous studies. The empirical analysis will be performed with data from the Employment Opportunity Pilot Projects baseline household survey, which provides continuous employment histories over a period of up to 22 months, birth dates, child care use and a wealth of other information on a sample of almost 30,000 families. The analysis will yield results that can serve as a guide to understanding the possible effects of future changes in government child care policy.