IDEAS home Printed from https://ideas.repec.org/p/fip/fedfwp/96941.html
   My bibliography  Save this paper

Long-Run Effects of Incentivizing Work After Childbirth

Author

Abstract

This paper identifies the impact of increasing post-childbirth work incentives on mothers’ long-run careers. We exploit variation in work incentives across mothers based on the timing of a first birth and eligibility for the 1993 expansion of the Earned Income Tax Credit. Ten to nineteen years after a first birth, single mothers who were exposed to the expansion immediately after birth (“early”), rather than 3 6 years later (“late”), have 0.62 more years of work experience and 4.2% higher earnings conditional on working. We show that higher earnings are primarily explained by improved wages due to greater work experience.

Suggested Citation

  • Elira Kuka & Na’ama Shenhav, 2023. "Long-Run Effects of Incentivizing Work After Childbirth," Working Paper Series 2023-27, Federal Reserve Bank of San Francisco.
    • Handle: RePEc:fip:fedfwp:96941
    DOI: 10.24148/wp2023-27
    as

    Download full text from publisher

    File URL: https://www.frbsf.org/wp-content/uploads/sites/4/wp2023-27.pdf
    File Function: Full text - article PDF
    Download Restriction: no
    File URL: https://libkey.io/10.24148/wp2023-27?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Bruce D. Meyer & Dan T. Rosenbaum, 2001. "Welfare, the Earned Income Tax Credit, and the Labor Supply of Single Mothers," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(3), pages 1063-1114.
    2. Esther Duflo, 2001. "Schooling and Labor Market Consequences of School Construction in Indonesia: Evidence from an Unusual Policy Experiment," American Economic Review, American Economic Association, vol. 91(4), pages 795-813, September.
    3. Day Manoli & Nicholas Turner, 2018. "Cash-on-Hand and College Enrollment: Evidence from Population Tax Data and the Earned Income Tax Credit," American Economic Journal: Economic Policy, American Economic Association, vol. 10(2), pages 242-271, May.
    4. Mincer, Jacob & Polachek, Solomon, 1974. "Family Investment in Human Capital: Earnings of Women," Journal of Political Economy, University of Chicago Press, vol. 82(2), pages 76-108, Part II, .
    5. Elira Kuka, 2020. "Quantifying the Benefits of Social Insurance: Unemployment Insurance and Health," The Review of Economics and Statistics, MIT Press, vol. 102(3), pages 490-505, July.
    6. Maya Rossin‐Slater & Christopher J. Ruhm & Jane Waldfogel, 2013. "The Effects of California's Paid Family Leave Program on Mothers’ Leave‐Taking and Subsequent Labor Market Outcomes," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 32(2), pages 224-245, March.
    7. Gordon B. Dahl & Lance Lochner, 2012. "The Impact of Family Income on Child Achievement: Evidence from the Earned Income Tax Credit," American Economic Review, American Economic Association, vol. 102(5), pages 1927-1956, August.
    8. Francine D. Blau & Lawrence M. Kahn, 2017. "The Gender Wage Gap: Extent, Trends, and Explanations," Journal of Economic Literature, American Economic Association, vol. 55(3), pages 789-865, September.
    9. Rossin-Slater, Maya, 2017. "Maternity and Family Leave Policy," IZA Discussion Papers 10500, Institute of Labor Economics (IZA).
    10. Jacob Bastian, 2020. "The Rise of Working Mothers and the 1975 Earned Income Tax Credit," American Economic Journal: Economic Policy, American Economic Association, vol. 12(3), pages 44-75, August.
    11. David Card & Ana Rute Cardoso & Patrick Kline, 2016. "Bargaining, Sorting, and the Gender Wage Gap: Quantifying the Impact of Firms on the Relative Pay of Women," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(2), pages 633-686.
    12. Hilary W. Hoynes & Ankur J. Patel, 2018. "Effective Policy for Reducing Poverty and Inequality?: The Earned Income Tax Credit and the Distribution of Income," Journal of Human Resources, University of Wisconsin Press, vol. 53(4), pages 859-890.
    13. Nada Eissa & Jeffrey B. Liebman, 1996. "Labor Supply Response to the Earned Income Tax Credit," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 111(2), pages 605-637.
    14. Raj Chetty & John N. Friedman & Emmanuel Saez, 2013. "Using Differences in Knowledge across Neighborhoods to Uncover the Impacts of the EITC on Earnings," American Economic Review, American Economic Association, vol. 103(7), pages 2683-2721, December.
    15. Marianne P. Bitler & Hilary W. Hoynes, 2010. "The State of Social Safety Net in the Post-Welfare Reform Era," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 41(2 (Fall)), pages 71-147.
    16. Marianne Bitler & Hilary W. Hoynes, 2010. "The State of the Safety Net in the Post-Welfare Reform Era," NBER Working Papers 16504, National Bureau of Economic Research, Inc.
    17. Ilyana Kuziemko & Jessica Pan & Jenny Shen & Ebonya Washington, 2018. "The Mommy Effect: Do Women Anticipate the Employment Effects of Motherhood?," NBER Working Papers 24740, National Bureau of Economic Research, Inc.
    18. Maya Rossin-Slater, 2017. "Maternity and Family Leave Policy," NBER Working Papers 23069, National Bureau of Economic Research, Inc.
    19. Emmanuel Saez, 2010. "Do Taxpayers Bunch at Kink Points?," American Economic Journal: Economic Policy, American Economic Association, vol. 2(3), pages 180-212, August.
    20. Marianne Bitler & Hilary Hoynes & Elira Kuka, 2017. "Do In-Work Tax Credits Serve as a Safety Net?," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 319-350.
    21. Henrik Kleven & Camille Landais & Johanna Posch & Andreas Steinhauer & Josef Zweimüller, 2019. "Child Penalties across Countries: Evidence and Explanations," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 122-126, May.
    22. Laurent Lequien, 2012. "The Impact of Parental Leave Duration on Later Wages," Annals of Economics and Statistics, GENES, issue 107-108, pages 267-285.
    23. Martha J. Bailey & Shuqiao Sun & Brenden Timpe, 2021. "Prep School for Poor Kids: The Long-Run Impacts of Head Start on Human Capital and Economic Self-Sufficiency," American Economic Review, American Economic Association, vol. 111(12), pages 3963-4001, December.
    24. Gordon B. Dahl & Katrine V. Løken & Magne Mogstad & Kari Vea Salvanes, 2016. "What Is the Case for Paid Maternity Leave?," The Review of Economics and Statistics, MIT Press, vol. 98(4), pages 655-670, October.
    25. Daniel Feenberg & Elisabeth Coutts, 1993. "An introduction to the TAXSIM model," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 12(1), pages 189-194.
    26. Paul Frijters & David W. Johnston & Michael A. Shields, 2014. "The Effect Of Mental Health On Employment: Evidence From Australian Panel Data," Health Economics, John Wiley & Sons, Ltd., vol. 23(9), pages 1058-1071, September.
    27. Jeffrey Grogger, 2009. "Welfare Reform, Returns to Experience, and Wages: Using Reservation Wages to Account for Sample Selection Bias," The Review of Economics and Statistics, MIT Press, vol. 91(3), pages 490-502, August.
    28. Bailey, Martha J. & Byker, Tanya & Patel, Elena & Ramnath, Shanthi, 2019. "The Long-Term Effects of California’s 2004 Paid Family Leave Act on Women’s Careers: Evidence from U.S. Tax Data," CEPR Discussion Papers 14217, C.E.P.R. Discussion Papers.
    29. Katherine Michelmore, 2018. "The earned income tax credit and union formation: The impact of expected spouse earnings," Review of Economics of the Household, Springer, vol. 16(2), pages 377-406, June.
    30. David Neumark & Peter Shirley, 2017. "The Long-Run Effects of the Earned Income Tax Credit on Women’s Earnings," NBER Working Papers 24114, National Bureau of Economic Research, Inc.
    31. Raj Chetty & Emmanuel Saez, 2013. "Teaching the Tax Code: Earnings Responses to an Experiment with EITC Recipients," American Economic Journal: Applied Economics, American Economic Association, vol. 5(1), pages 1-31, January.
    32. Petter Lundborg & Erik Plug & Astrid Würtz Rasmussen, 2017. "Can Women Have Children and a Career? IV Evidence from IVF Treatments," American Economic Review, American Economic Association, vol. 107(6), pages 1611-1637, June.
    33. repec:mpr:mprres:6064 is not listed on IDEAS
    34. V. Joseph Hotz & John Karl Scholz, 2006. "Examining the Effect of the Earned Income Tax Credit on the Labor Market Participation of Families on Welfare," NBER Working Papers 11968, National Bureau of Economic Research, Inc.
    35. Kelly Bishop & Bradley Heim & Kata Mihaly, 2009. "Single Women's Labor Supply Elasticities: Trends and Policy Implications," ILR Review, Cornell University, ILR School, vol. 63(1), pages 146-168, October.
    36. Kory Kroft & Fabian Lange & Matthew J. Notowidigdo, 2013. "Duration Dependence and Labor Market Conditions: Evidence from a Field Experiment," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 128(3), pages 1123-1167.
    37. Rily Wilson, 2020. "The EITC and Employment Transitions: Labor Force Attachment and Annual Exit," National Tax Journal, National Tax Association;National Tax Journal, vol. 73(1), pages 11-46, March.
    38. Bradley T. Heim, 2007. "The Incredible Shrinking Elasticities: Married Female Labor Supply, 1978–2002," Journal of Human Resources, University of Wisconsin Press, vol. 42(4).
    39. Austin Nichols & Jesse Rothstein, 2015. "The Earned Income Tax Credit," NBER Chapters, in: Economics of Means-Tested Transfer Programs in the United States, Volume 1, pages 137-218, National Bureau of Economic Research, Inc.
    40. Jeffrey Grogger, 2003. "The Effects of Time Limits, the EITC, and Other Policy Changes on Welfare Use, Work, and Income among Female-Headed Families," The Review of Economics and Statistics, MIT Press, vol. 85(2), pages 394-408, May.
    41. Bruce D. Meyer & Wallace K. C. Mok & James X. Sullivan, 2015. "Household Surveys in Crisis," Journal of Economic Perspectives, American Economic Association, vol. 29(4), pages 199-226, Fall.
    42. John M. Abowd & Martha H. Stinson, 2013. "Estimating Measurement Error in Annual Job Earnings: A Comparison of Survey and Administrative Data," The Review of Economics and Statistics, MIT Press, vol. 95(5), pages 1451-1467, December.
    43. Hilary Hoynes & Doug Miller & David Simon, 2015. "Income, the Earned Income Tax Credit, and Infant Health," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 172-211, February.
    44. Canaan, Serena, 2022. "Parental leave, household specialization and children’s well-being," Labour Economics, Elsevier, vol. 75(C).
    45. David Neumark & Peter Shirley, 2020. "Long-Run Effects of the Earned Income Tax Credit," FRBSF Economic Letter, Federal Reserve Bank of San Francisco, vol. 2020(01), pages 1-05, January.
    46. David Card & Dean R. Hyslop, 2005. "Estimating the Effects of a Time-Limited Earnings Subsidy for Welfare-Leavers," Econometrica, Econometric Society, vol. 73(6), pages 1723-1770, November.
    47. Claudia Goldin, 2014. "A Grand Gender Convergence: Its Last Chapter," American Economic Review, American Economic Association, vol. 104(4), pages 1091-1119, April.
    48. repec:adr:anecst:y:2012:i:107-108:p:10 is not listed on IDEAS
    49. Nathaniel Hendren & Ben Sprung-Keyser, 2019. "A Unified Welfare Analysis of Government Policies," NBER Working Papers 26144, National Bureau of Economic Research, Inc.
    50. Rebecca M. Blank & Patricia Ruggles, 1996. "When Do Women Use Aid to Families with Dependent Children and Food Stamps? The Dynamics of Eligibility Versus Participation," Journal of Human Resources, University of Wisconsin Press, vol. 31(1), pages 57-89.
    51. Emily Nix & Martin Eckhoff Andresen, 2019. "What Causes the Child Penalty? Evidence from Same Sex Couples and Policy Reforms," Discussion Papers 902, Statistics Norway, Research Department.
    52. Jacob Bastian & Katherine Michelmore, 2018. "The Long-Term Impact of the Earned Income Tax Credit on Children’s Education and Employment Outcomes," Journal of Labor Economics, University of Chicago Press, vol. 36(4), pages 1127-1163.
    53. Martha J. Bailey & Tanya S. Byker & Elena Patel & Shanthi Ramnath, 2019. "The Long-Run Effects of California’s Paid Family Leave Act on Women’s Careers and Childbearing: New Evidence from a Regression Discontinuity Design and U.S. Tax Data," NBER Working Papers 26416, National Bureau of Economic Research, Inc.
    54. Ellwood, David T., 2000. "The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements," National Tax Journal, National Tax Association, vol. 53(n. 4), pages 1063-1106, December.
    55. Uta Schönberg & Johannes Ludsteck, 2014. "Expansions in Maternity Leave Coverage and Mothers' Labor Market Outcomes after Childbirth," Journal of Labor Economics, University of Chicago Press, vol. 32(3), pages 469-505.
    56. Jenna E. Stearns, 2018. "The Long-Run Effects of Wage Replacement and Job Protection: Evidence from Two Maternity Leave Reforms in Great Britain," NBER Chapters, in: Trans-Atlantic Public Economics Seminar 2018, National Bureau of Economic Research, Inc.
    57. Francine D. Blau & Lawrence M. Kahn, 2007. "Changes in the Labor Supply Behavior of Married Women: 1980–2000," Journal of Labor Economics, University of Chicago Press, vol. 25(3), pages 393-438.
    58. Rafael Lalive & Josef Zweimüller, 2009. "How Does Parental Leave Affect Fertility and Return to Work? Evidence from Two Natural Experiments," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 124(3), pages 1363-1402.
    59. Eissa, Nada & Hoynes, Hilary Williamson, 2004. "Taxes and the labor market participation of married couples: the earned income tax credit," Journal of Public Economics, Elsevier, vol. 88(9-10), pages 1931-1958, August.
    60. Katherine Baicker & Amy Finkelstein & Jae Song & Sarah Taubman, 2014. "The Impact of Medicaid on Labor Market Activity and Program Participation: Evidence from the Oregon Health Insurance Experiment," American Economic Review, American Economic Association, vol. 104(5), pages 322-328, May.
    61. Ellwood, David T., 2000. "The Impact of the Earned Income Tax Credit and Social Policy Reforms on Work, Marriage, and Living Arrangements," National Tax Journal, National Tax Association;National Tax Journal, vol. 53(4), pages 1063-1106, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Jacob E. Bastian, 2024. "The EITC in rural and economically distressed areas: More bang per buck?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(1), pages 136-159, February.
    2. Otto Lenhart, 2021. "Earned income tax credit and crime," Contemporary Economic Policy, Western Economic Association International, vol. 39(3), pages 589-607, July.
    3. Lisa Cameron & Diana Contreras Suarez & Yi-Ping Tseng, 2023. "Women’s transitions in the labour market as a result of childbearing: the challenges of formal sector employment in Indonesia," Melbourne Institute Working Paper Series wp2023n06, Melbourne Institute of Applied Economic and Social Research, The University of Melbourne.
    4. Jonathan Meer & Joshua Witter, 2022. "Effects of the Earned Income Tax Credit for Childless Adults: A Regression Discontinuity Approach," NBER Chapters, in: Tax Policy and the Economy, Volume 37, pages 175-198, National Bureau of Economic Research, Inc.
    5. Nicardo S. McInnis & Katherine Michelmore & Natasha Pilkauskas, 2023. "The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit," NBER Working Papers 31429, National Bureau of Economic Research, Inc.
    6. Bastian, Jacob E. & Jones, Maggie R., 2021. "Do EITC expansions pay for themselves? Effects on tax revenue and government transfers," Journal of Public Economics, Elsevier, vol. 196(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Florian Buhlmann & Benjamin Elsner & Andreas Peichl, 2018. "Tax refunds and income manipulation: evidence from the EITC," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 25(6), pages 1490-1518, December.
    2. Elliott Isaac, 2020. "Marriage, Divorce, and Social Safety Net Policy," Southern Economic Journal, John Wiley & Sons, vol. 86(4), pages 1576-1612, April.
    3. Diane Whitmore Schanzenbach & Michael R. Strain, 2021. "Employment Effects of the Earned Income Tax Credit: Taking the Long View," Tax Policy and the Economy, University of Chicago Press, vol. 35(1), pages 87-129.
    4. Jacob Bastian, 2020. "The EITC and Maternal Time Use: More Time Working and Less Time with Kids?," Working Papers 2020-077, Human Capital and Economic Opportunity Working Group.
    5. Bastian, Jacob E. & Jones, Maggie R., 2021. "Do EITC expansions pay for themselves? Effects on tax revenue and government transfers," Journal of Public Economics, Elsevier, vol. 196(C).
    6. Shirley Peter, 2020. "First-time mothers and the labor market effects of the earned income tax credit," IZA Journal of Labor Policy, Sciendo & Forschungsinstitut zur Zukunft der Arbeit GmbH (IZA), vol. 10(1), pages 1-53, March.
    7. Hilary W. Hoynes & Diane Whitmore Schanzenbach, 2018. "Safety Nets Investments in Children," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 49(1 (Spring), pages 89-150.
    8. David Neumark & Brian Asquith & Brittany Bass, 2020. "Longer‐Run Effects Of Anti‐Poverty Policies On Disadvantaged Neighborhoods," Contemporary Economic Policy, Western Economic Association International, vol. 38(3), pages 409-434, July.
    9. Sarah H. Bana & Kelly Bedard & Maya Rossin‐Slater, 2020. "The Impacts of Paid Family Leave Benefits: Regression Kink Evidence from California Administrative Data," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 39(4), pages 888-929, September.
    10. Hoynes, Hilary & Rothstein, Jesse, 2016. "Tax Policy Toward Low-Income Families," Department of Economics, Working Paper Series qt87d6v10j, Department of Economics, Institute for Business and Economic Research, UC Berkeley.
    11. Gunter, Samara, 2013. "State Earned Income Tax Credits and Participation in Regular and Informal Work," National Tax Journal, National Tax Association;National Tax Journal, vol. 66(1), pages 33-62, March.
    12. Landais, Camille & Kleven, Henrik & Posch, Johanna & Steinhauer, Andreas & Zweimüller, Josef, 2020. "Do Family Policies Reduce Gender Inequality? Evidence from 60 Years of Policy Experimentation," CEPR Discussion Papers 15437, C.E.P.R. Discussion Papers.
    13. Nicardo S. McInnis & Katherine Michelmore & Natasha Pilkauskas, 2023. "The Intergenerational Transmission of Poverty and Public Assistance: Evidence from the Earned Income Tax Credit," NBER Working Papers 31429, National Bureau of Economic Research, Inc.
    14. Marianne Bitler & Hilary Hoynes & Elira Kuka, 2017. "Do In-Work Tax Credits Serve as a Safety Net?," Journal of Human Resources, University of Wisconsin Press, vol. 52(2), pages 319-350.
    15. O. Kondratjeva & S. P. Roll & M. Despard & M. Grinstein-Weiss, 2022. "The Impact of Tax Refund Delays on the Experience of Hardship Among Lower-Income Households," Journal of Consumer Policy, Springer, vol. 45(2), pages 239-280, June.
    16. Jacob E. Bastian, 2024. "The EITC in rural and economically distressed areas: More bang per buck?," International Tax and Public Finance, Springer;International Institute of Public Finance, vol. 31(1), pages 136-159, February.
    17. David Neumark & Katherine E. Williams, 2020. "Do State Earned Income Tax Credits Increase Participation in the Federal EITC?," NBER Working Papers 27626, National Bureau of Economic Research, Inc.
    18. Elliott Isaac, 2018. "Marriage, Divorce, and Tax and Transfer Policy," Working Papers 1810, Tulane University, Department of Economics.
    19. Naveen Singhal, 2021. "Discrete Choice Models for Estimating Labor Supply: Working Paper 2021-04," Working Papers 57027, Congressional Budget Office.
    20. Bradley Hardy & Timothy Smeeding & James P. Ziliak, 2018. "The Changing Safety Net for Low-Income Parents and Their Children: Structural or Cyclical Changes in Income Support Policy?," Demography, Springer;Population Association of America (PAA), vol. 55(1), pages 189-221, February.

    More about this item

    Keywords

    employment; children; incentives; Earned Income Tax Credit (EITC);
    All these keywords.

    JEL classification:

    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • H20 - Public Economics - - Taxation, Subsidies, and Revenue - - - General

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:fip:fedfwp:96941. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Federal Reserve Bank of San Francisco Research Library (email available below). General contact details of provider: https://edirc.repec.org/data/frbsfus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.