Employment and Child Care Decisions of Women and the Well-Being of Their Children

Abstract

This paper develops and estimates a dynamic model of employment and child care decisions of women after birth in order to i) characterize women's behavior after birth and ii) evaluate the effects of mothers' decisions on children's cognitive ability. I use data from the NLSY to estimate the model. Results indicate that the effects of maternal employment and child care on childen's ability are negative and rather sizeable. One year of maternal full-time work and child care use is associated with a 2% reduction in ability test scores. Finally, I assess the impact of policies related to parental leave and child care on women's decisions and children's outcomes.

Keywords: Employment, child care, child development

JEL Classification: D1, J1, J22