Maternal Labor Supply Research Articles

Fertility and labor supply: evidence from the One-Child Policy in China

ABSTRACTThis study provides new evidence on on the causal effect of fertility on maternal labor supply in rural China, using the fact that in some parts of rural China couples are allowed to have a second child if their firstborn is female. Estimates show that a second child reduces maternal labor force participation by 4.6 percentage points, labor supply intensity (hours worked conditional on employment) by 1.4 h per week and monthly income by 54.5 Chinese Yuan (18.7 percent). Further, the labor supply of mothers whose husbands are rural-to-urban migrants is the most sensitive to having an additional child, likely because they have more difficulty balancing farming and childcare. Conversely, labor supply is not reduced by fertility for mothers living in three-generation families, most likely because grandparents can provide both time and money to help with childcare.

School entry, afternoon care, and mothers’ labour supply

The availability of childcare is a crucial factor for mothers’ labour force participation. While most of the literature examines childcare for preschool children, we specifically focus on primary school-aged children, estimating the effect of formal afternoon care on maternal labour supply. To do so, we use a novel matching technique, entropy balancing, and draw on the rich and longitudinal data of the German Socio-Economic Panel (SOEP). We show that children’s afternoon care increases mothers’ employment rates and their working hours. To confirm the robustness of our results, we conduct a series of sensitivity analyses and apply a newly proposed method to assess possible bias from omitted variables. Our findings highlight how childcare availability shapes maternal employment patterns well after school entry.

Childcare availability and maternal labor supply in a setting of high potential impact

We estimate the effect of subsidized childcare availability on Hungarian mothers’ labor supply, using a discontinuity in kindergarten eligibility at age 3 of children. The effect is identified in a setting where policy intervention has a high potential impact, since maternal labor supply is very low under age 3 of children, but high for mothers with older children. We find that access to subsidized childcare increases maternal labor supply by 11.7 percentage points or 24%, an impact that is higher than what has been found in previous quasi-experimental studies from most other countries. However, the potential effectiveness of future childcare expansion under age 3 may be constrained by further institutional factors, such as very long parental leave, traditional cultural views regarding maternal employment and institutional childcare, and the lack of flexible work forms. A comprehensive policy approach, including linked reforms of these other factors, is needed to achieve such a high effect.

Free Daycare and Its Effects on Children and Their Families

Many governments invest substantial public funds to foster early childhood education. And yet, there are still many open questions who responds to and who benefits from public investments into early childcare. We use the introduction of free public daycare in German states to analyze its effects on children and their families. Our results suggest that effects of the policy differ by child age, gender and socio-economic status. Free daycare increases attendance among 2-3 year old’s with little response among older children. Yet, even with access to free daycare, we find few effects on maternal labor supply. Responses are generally stronger for poorer households and other vulnerable families. Child development, in turn, shows gender-specific effects that are in part explained by the differential choices parents of boys make compared to parents of girls.

Evaluating the Effects of Childcare Policies on Children’s Cognitive Development and Maternal Labor Supply

To explore the role of childcare policies in the development of early cognitive skills, this paper jointly estimates a cognitive achievement production function and a dynamic, discrete choice model of maternal labor supply and childcare decisions. Using counter/actuals from the model, I investigate how the designs of two childcare programs, Head Start and childcare subsidies, affect the formation of cognitive skills through maternal work and childcare decisions. The results suggest large impacts on cognitive skills from expanding Head Start to current noneligibles and negligible impacts of subsidies on cognitive skills of current eligibles. [ABSTRACT FROM AUTHOR]

Early kindergarten, maternal labor supply and children's outcomes: Evidence from Italy

We analyze a reform that introduced early access to subsidized childcare for 2-year-old children in Italy, exploring the effects on several measures of maternal labor supply and on children's cognitive outcomes. Our identification strategy exploits discontinuities in the eligibility rules and the staggered implementation of the reform. We find that the policy increased mothers' participation in the labor market and lowered the reservation wage of the unemployed, thus increasing their likelihood of finding a job. At the same time, the newly introduced childcare arrangement did not affect children's cognitive development, irrespective of their family background.

Fathers' Parental Leave-Taking, Childcare Involvement and Mothers' Labor Market Participation

This study analyzes the effect of fathers' parental leave-taking on the time fathers spend with their children and on mothers' and fathers' labor supply. Fathers' leave-taking is highly selective and the identification of causal effects relies on within-father differences in leave-taking for first and higher order children that were triggered by a policy reform promoting more gender equality in leave-taking. Results show that even short periods of fathers' parental leave may have long-lasting effects on fathers' involvement in childcare and housework. Effects on maternal labor supply are also significantly positive but do not persist over time.

Money vs. Time: Family Income, Maternal Labor Supply, and Child Development

This paper analyzes the relationship between work-promoting policies and child development. First, we provide new comprehensive evidence of the unintended consequences for child development of the Earned Income Tax Credit expansions during the 1990s in the United States. Second, our theory-driven empirical model reconciles this result by shedding light on the trade-off between the income effect (economic resources) and the substitution effect (time and quality of the parent-child interactions) on a child's cognitive and behavioral development. This money versus time trade-off is most pronounced for disadvantaged mothers. Overall, our results call for a policy debate on how to design targeted supplements for disadvantaged families to support working mothers and their children.

Household Labor Supply, Child Development and Childcare Policies in the United States

This paper studies the dynamic relationship between parental labor supply, children's cognitive development and intra-household bargaining power. To do so, I construct a model that incorporates preference heterogeneity across and within households, a constrained cooperative bargaining framework with explicit outside options, a dynamic technology of the child's cognitive development, and endogenous parental human capital and wages. Using detailed U.S. panel data on married households, I identify and estimate the model with the Method of Simulated Moments, and show that it replicates observable trends and heterogeneity in parental time use, the use of formal childcare arrangements and child test scores. I use the model to simulate the effects of cash transfers and formal childcare subsidies. First, I find that the cost-effectiveness of the recently expanded Child Tax Credit, in terms of fostering child cognition and reducing intra-household inequality, could be improved by giving cash to mothers directly, and by making the credit increase with the child's age. Second, I consider expansions of the Child and Dependent Care Tax Credit which offer larger formal childcare subsidies and relax the employment requirements. I estimate that a 25 percent subsidy could boost young children's skills by over 0.1 standard deviations, increase maternal labor supply even when there is no work requirement, and be financed at no additional cost through a 50 percent reduction in the Child Tax Credit for households with young children.

The wall for mothers with first graders: availability of afterschool childcare and continuity of maternal labor supply in Japan

In Japan, the availability of afterschool childcare for young school children is quite limited, although many preschool children attend daycare centers. As a result, parents experience a sudden lack of formal childcare when their child starts school. This dearth of childcare services is notorious, and has been referred to as the “Wall for Mothers with First Graders”. To illustrate the quantitative impacts of the Wall, I compare the maternal labor supply between nuclear and three-generation households at the time of the firstborn child’s school entry. Since mothers from three-generation households generally substitute formal afterschool childcare with informal childcare provided by the grandparents, I hypothesize that the first child’s school entry mainly affects the labor supply of mothers from nuclear households. Using the Japanese Panel Survey of Consumers, a difference-in-differences/event-study analysis is applied to the sample of mothers whose firstborn child was in daycare as a preschooler. The overall findings are generally consistent with my hypothesis. First, the baseline result shows that the labor market participation rate decreases by 10.9 percentage points at the time of their firstborn child’s school entry among mothers from nuclear households compared with those from three-generation households. Second, the firstborn child’s school entry decreases his/her mother’s daily paid work by about half an hour and increases time allocated to housework and childcare by the same amount. Taken together, this study shows that the shortage of afterschool childcare among nuclear households interrupts maternal labor supply.

The Effect of Family-Friendly Policies on Fertility and Maternal Labor Supply

Low fertility is a major policy focus in Japan. Many policies, such as an increase in replacement allowances during parental leave, were rolled out during the 1990s and early 2000s with little evidence that they had any effect on fertility or labor supply. This study assesses the impact of policies designed to promote a family-friendly work culture on childbirth and labor supply from the mid-2000s on. The causal effects are identified by investigating two reform policies targeted at two different sizes of firms. The paper contributes to the literature on laws that impact organizational culture in a society where both gender and organizational norms are strong. The short-hour option in Japan significantly increased childbirth among working women who had been childless. The intent to give birth also increased among childless women at the treated firms, and there was an increased likelihood of women taking up permanent employment at reduced hours following their first childbirth. The policy effect was not significant for second or third births.

The impact of maternal employment on children's adiposity: Evidence from China's labor policy reform.

China has experienced a rapid growth in childhood adiposity in recent years. Although a large number of studies examine the effect of maternal employment on children's adiposity in developed countries, only a few studies investigate the issue in developing countries. Moreover, existing studies tend to suffer from a potential endogeneity issue. We provide new evidence on the causal effect of maternal employment on children's adiposity in China. We employ a difference-in-difference strategy that takes advantage of China's 1995 legislative change to labor regulations, which reduced the number of workdays from 6 to 5 days per week. Using longitudinal data from the China Health and Nutrition Survey (CHNS), we compare children whose mothers are wage-earning employees to those whose mothers are self-employed because the reform only affected the former. Although maternal employment and childhood obesity in China exhibits the same positive association as in the United States, our difference-in-difference estimates present a different picture. We find that a reduction in the maternal labor supply led to children's weight gain. Further investigation reveals that the effect was stronger among children who were male, younger, in urban areas, and from households with low socioeconomic status. Our evidence suggests that a change in maternal behaviors was likely responsible for children's weight gain. In particular, a greater proportion of treatment group mothers cooked and also devoted more time to cooking after the reform, which led to an increased caloric intake by their children. Such weight gain was beneficial for children who were previously underweight but harmful to those who became overweight. The finding implies that additional maternal time at home likely has a different effect in China compared to the United States.

Self-Employment, Workplace Flexibility, and Maternal Labor Supply: A Life-Cycle Model

While American women's employment rates fall in the years after they have a child, their self-employment rates do not. These contrasting patterns may be explained by the fact that self-employed women often have more control over their work schedule, hours, and location than wage and salary employed women. This paper quantifies the value of self-employment as a flexible work alternative for married mothers with young children and estimates the impact of the additional flexibility on women's employment and fertility decisions. Using data from the NLSY79, I incorporate self-employment into a life-cycle model of labor supply and fertility. I find that mothers with preschool-aged children value the flexible amenities self-employment offers at $7,400 annually, which represents around 25% of their average wage and salary earnings. A partial equilibrium counterfactual exercise suggests that self-employment flexibility increases fertility and self-employment, but decreases women's median lifetime earnings by 1.2%. Overall, my findings offer evidence that mothers value workplace flexibility and employment decisions.

Family Policies and Female Employment in Japan

This paper discusses how childcare and parental leave policies affect female employment by reviewing the international evidence and recent papers on Japan. These papers estimate causal effects of policies by exploiting policy changes, which is a more credible identification strategy than those applied in earlier observational studies. The literature on parental leave finds that a more generous leave package tends to delay mothers’ return to work, but it does not have detrimental effects on maternal labour supply in the medium to long run. Some papers also find that provision of job protection for around 1 year can increase maternal employment, but longer job protection has little additional effects. The literature on childcare policies finds that maternal employment does not necessarily increase, because the expansion of childcare may crowd out informal childcare arrangements, such as care provided by grandparents. Findings by recent papers on Japan are largely consistent with the international evidence.

Children's Health, Maternal Labour Supply and Wealth Accumulation: Theory, Evidence and Policy Approach

Understanding the impediments of children’s health on maternal labour and wealth accumulation in Africa is critical. The preoccupation of this study has been to develop a conceptual framework based on exploring the health-labour-wealth relationship. This is, in an attempt to show the centrality and importance of children’s health in understanding: maternal labour supply and wealth accumulation for broader appreciation. Based on empirical evidences, we observed that children’s health positively and significantly influenced maternal labour and also strongly corroborates with wealth accumulation. From policy point of view, investing in children’s health can motivates population growth, increase the supply of labour, promote savings and alleviate poverty.

The Wall for Mothers with First Graders: Availability of Afterschool Childcare and Maternal Labor Supply in Japan

In Japan, the availability of afterschool childcare for young school children is quite limited, although many preschool children attend daycare centers. As a result, parents experience a sudden lack of formal childcare when their child starts school. This dearth of childcare services is notorious, and has been referred to as the “Wall for Mothers with First Graders. To illustrate the quantitative impacts of the wall, I compare the maternal labor supply between nuclear and three-generation households at the time of the firstborn child’s school entry. Since mothers from three-generation households generally substitute formal afterschool childcare with informal childcare provided by the grandparents, I hypothesize that the first child’s school entry mainly affects the labor supply of mothers from nuclear households. Using the Japanese Panel Survey of Consumers, a difference-in-differences analysis is applied to the sample of mothers whose firstborn child was in daycare as a preschooler. The overall findings are generally consistent with my hypothesis. First, the baseline result shows that the labor market participation rate decreases by 10.9 percentage points at the time of their firstborn child’s school entry among mothers from nuclear households compared with those from three-generation households. Second, the firstborn child’s school entry decreases his/her mother’s daily paid work by 0.65 hours and increases time allocated to housework and childcare by 0.68 hours. Taken together, this study shows that the shortage of afterschool childcare among nuclear households discourages maternal labor supply.

First Daughter Effects in Japan

Some influential studies suggest that a firstborn daughter is associated with (1) lower marital quality and (2) greater participation in the labor market by mothers. They also point out that a strong preference for sons among fathers may explain these first daughter effects. This study replicates these findings in large cities in Japan, where parents generally exhibit no son preference. In order to derive causal effects, quasi-random assignment of the firstborn child's sex was exploited. The main results from two surveys consistently find fairly sizable effects from the firstborn child's sex on later marital life: a firstborn daughter is associated with an increased incidence of domestic violence between her father and mother. In addition, firstborn daughters are associated with lower marital and family happiness among mothers. Concerning the effects of the firstborn child's sex on maternal labor supply, mothers with a firstborn daughter were consistently found to exhibit a greater labor supply. Taken together, first daughter effects in Japan appear to be similar to those reported in countries with a strong parental son preference. This finding suggests that care should be taken when trying to induce parental preference on child sex by observing marital status. After these results are presented, alternative potential mechanisms are discussed.

Maternal Labor Supply, Childcare, and the Health of Preschool Children in Japan

Maternal Labor Supply, Childcare, and the Health of Preschool Children in Japan

School Entry, Afternoon Care and Mothers' Labour Supply

Most literature on the relationship between childcare availability and maternal labour force participation examines childcare for preschool aged children. Yet families must continue to arrange childcare once their children enter primary school, particularly in countries where the school day ends at lunchtime. In this paper we examine the case of Germany, a country that has moved from an exclusively half-day school system to one where formal afternoon care is increasingly available. We estimate the effect of afternoon care on maternal labour supply. To do so, we use a novel matching technique, entropy balancing, and draw on the rich and longitudinal data of the German Socio-Economic Panel (SOEP). We show that children’s afternoon care increases mothers’ employment rate and their working hours. To confirm the robustness of our results we conduct a series of sensitivity analysis and apply a newly proposed method to assess possible bias from omitted variables. Our findings highlight how childcare availability shapes maternal employment patterns well after school entry.

Boys, Girls, and Grandparents: The Impact of the Sex of Preschool-Aged Children on Family Living Arrangements and Maternal Labor Supply

This paper considers how the sex of preschool-aged children can affect living arrangements and maternal labor supply. In an extended family with young children, the joint decisions of co-residence and time allocations are driven by the concern that the companionship of children is a household public good and that family members share childcare and related domestic duties. The incentive to share children’s companionship is affected by son preference, whereas the economic motive for labor division hinges on the potential wage rate of the mother. The preference for sons drives the decisions in households with mothers whose wage rates are low, whereas both channels determine the decisions in households with mothers whose wage rates are high. Using China Health and Nutrition Survey (CHNS) data, we find that among less-educated mothers, the incidence of a family co-residing with the paternal grandmother is at least 8.6 percentage points higher if the firstborn is a boy. At the same time, maternal labor supply increases by 2.892 days per month. By contrast, for educated mothers, the propensity for co-residence is higher, and the working hours are longer than for less-educated mothers, and the impact of the child’s sex is not significant. This paper not only provides a better understanding of the demographic and economic factors determining co-residence and intra-household time allocations, but also lends empirical support to policies aiming to increase female labor supply and improve the well-being of girls.