The Effect of Maternal Labor Supply on Children: Evidence from Bunching
We study the effect of maternal labor supply in the first three years of life on early childhood cognitive skills. We pay particular attention to heterogeneous effects by the skill of the mother, by the intensity of her labor supply, and by her pre-birth wages. We correct for selection using a control function approach which uses the fact that many mothers are bunched at zero working hours – skill variation in the children of these bunched mothers is informative about the effect of unobservables on skills. We find that maternal labor supply typically has a significant, negative effect on children’s early cognitive skills, with more negative effects for higher-skill mothers. By contrast, we do not find significant heterogeneity depending on the pre-birth wage rate of the mother. These findings suggest that there may be more scope to avoid short-term, unintended consequences of maternal labor supply through policies that promote more flexible work arrangements rather than through policies that increase the financial rewards to working.
- DOI
- 10.1086/737996
- Language
- en
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