Increasing mother’s labor supply during a child’s preschool years may reduce time investments, yielding a negative direct effect on midchildhood and teenage outcomes. But as mother’s work hours increase, income will rise. Can income compensate for the negative effect of hours? Our mediation analysis exploits exogenous variation in both mother’s hours and family income. Results suggest a negative, insignificant direct effect from increasing mother’s hours on child test scores. However, the positive mediating effect of income creates a positive total effect on test scores (26% of a standard deviation) for a 10-hour increase in mother’s weekly hours in preschool years.

While a large literature has focused on the impact of parental investments on child cognitive development, very little is known about the role of the child’s own investments alongside that of the parents. By using the Child Development Supplement of the Panel Study of Income Dynamics, we model the cognitive production function for adolescents using an augmented value-added model and adopt an estimation method that takes account of unobserved child characteristics. We find that a child’s own investments made during adolescence matter more than the mother’s. Our empirical results appear to be robust to several sensitivity checks.