The Long-Run Labour Market Consequences of Teenage Motherhood

In this paper, we estimate the consequences of teenage motherhood on schooling and subsequent adult wages. The common wisdom states that teenage childbearing, by competing for time, reduces schooling and labour market experience, thus reducing adult wages. However, the decisions to have a child as a teenager and to quit school at 16 might be endogenous. In order to design an effective policy reducing the negative impact of teenage pregnancy, it is important to study its impact in the long run. Using data from the NCDS, we find that teenage childbearing decreases the probability of post-16 schooling by 18% to 24%. This negative effect on schooling ranges from 7% to 22% when accounting for unobserved heterogeneity. Based on the lower estimates, the effect of childbearing on schooling may have been previously overstated. However, the long-term consequences of childbearing on adult work experience and wages are drastic. Experience is reduced by at least 2.5 years, and the pay differential at age 33 ranges from 12% to 52%. Teenage pregnancy appears to have long-term consequences. Government policy aiming to encourage participation in the labour market may be an efficient way to reduce these scarring effects.