The paper models the household demand for child care, mothers’ labor force participation and working hours, in Russia. The model estimates the effects of the price of child care, mothers’ wages, and household income on household behavior and well-being. The theoretical model yields several predictions. To test these, reduced-form equations of the discrete and continuous household choices are estimated jointly using the method of Semi-Parametric Full Information Maximum Likelihood. This method controls for the correlations of error terms across outcomes, and the correlation of error terms that can result when panel data are used. The results of this analysis indicate that the extent to which mothers participate in the labor force and for how many hours depends on the costs of child care and what level of hourly wages is available to them and to other members of their household. The simulations presented in this paper show that family allowances – intended as a means of reducing poverty – do not have a significant effect on the household choice of child care arrangements. Replacing family allowances with child care subsidies may have a strong positive effect on women's labor force participation and thus can be effective in reducing poverty.