Career and Family Choices in the Presence of Uncertainty

It is well known that women’s career outcomes are tied to fertility decisions and that occasionally educated women who had planned to stay in the labor market after childbirth exit the market. We examine women’s career, fertility, and educational choices in an environment of uncertainty regarding the possibility of achieving both a high-powered career and a family. In a simple framework, we show that although women may prefer to have both a prestigious career and a family they may choose a less prestigious job or no family due to the uncertainty involved in being able to achieve both a career and family. In an overlapping generations model, we examine how women’s beliefs about the probability of a career separation due to family obligations are formulated and show that a simple belief updating structure exists in which future generation’s beliefs may converge and certainly do not diverge from the true probability of a career separation.