Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size

45 Pages Posted: 5 Feb 1997 Last revised: 10 May 2000

See all articles by Joshua D. Angrist

Joshua D. Angrist

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); IZA Institute of Labor Economics

William N. Evans

University of Notre Dame; National Bureau of Economic Research (NBER)

Date Written: September 1996

Abstract

Although theoretical models of labor supply and the family are well developed, there are few credible estimates of key empirical relationships in the work-family nexus. This study uses a new instrumental variable, the sex composition of the first two births in families with at least two children, to estimate the effect of additional children on parents' labor supply. Instrumental variables estimates using the sex mix are substantial but smaller than the corresponding ordinary least squares (OLS) estimates. Moreover, unlike the OLS estimates, the female labor supply effects estimated using sex-mix instruments appear to be absent among more educated women and women with high-wage husbands. We also find that married women who have a third child reduce their labor supply by as much as women in the full sample, while there is no relationship between wives' child-bearing and husbands' labor supply. Finally results to estimates produced using twins to generate instruments. Estimates using twins instruments are very close to the estimates generated by sex-mix instruments, once the estimators are corrected for differences in the ages of children whose birth was caused by the instruments. The estimates imply that the labor supply consequences of child-bearing disappear by the time the child is about 13 years old.

Suggested Citation

Angrist, Joshua and Evans, William N., Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size (September 1996). NBER Working Paper No. w5778. Available at SSRN: https://ssrn.com/abstract=3695

Joshua Angrist (Contact Author)

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William N. Evans

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