The Effect of Children on the Level of Labor Market Involvement of Married Women: What is the Role of Education?

51 Pages Posted: 30 Mar 2009

See all articles by Kenneth R. Troske

Kenneth R. Troske

University of Kentucky - Department of Economics; University of Missouri at Columbia - Department of Economics; IZA Institute of Labor Economics

Alexandru Voicu

City University of New York (CUNY) - College of Staten Island; IZA Institute of Labor Economics

Abstract

We analyze the way women's education influences the effect of children on their level of labor market involvement. We propose an econometric model that accounts for the endogeneity of labor market and fertility decisions, for the heterogeneity of the effects of children and their correlation with the fertility decisions, and for the correlation of sequential labor market decisions. We estimate the model using panel data from NLSY79. Our results show that women with higher education work more before the birth of the first child, but children have larger negative effects on their level of labor market involvement. Differences across education levels are more pronounced with respect to full time employment than with respect to participation. Other things equal, higher wages reduce the effect of children on labor supply. Controlling for wages, women with higher education face larger negative effects of children on labor supply, which suggest they are characterized by a combination of higher marginal product of time spent in the production of child quality and higher marginal product of time relative to the marginal product of other inputs into the production of child quality.

Keywords: female labor supply, education, endogenous fertility decisions, heterogeneous children effects, multinomial probit model, Gibbs sampler

JEL Classification: C11, C15, J13, J22

Suggested Citation

Troske, Kenneth R. and Voicu, Alexandru, The Effect of Children on the Level of Labor Market Involvement of Married Women: What is the Role of Education?. IZA Discussion Paper No. 4074, Available at SSRN: https://ssrn.com/abstract=1369820

Kenneth R. Troske (Contact Author)

University of Kentucky - Department of Economics ( email )

Lexington, KY 40506
United States

University of Missouri at Columbia - Department of Economics ( email )

118 Professional Building
Columbia, MO 65211
United States
573-882-4229 (Phone)
573-882-2697 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Alexandru Voicu

City University of New York (CUNY) - College of Staten Island ( email )

NY
United States
718-982-2899 (Phone)

HOME PAGE: http://www.library.csi.cuny.edu/~pep/voicu.htm

IZA Institute of Labor Economics ( email )

P.O. Box 7240
Bonn, D-53072
Germany
+49 228 38 94 527 (Phone)
+49 228 38 94 510 (Fax)

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