Marriage, Motherhood, and Wages
We explore several problems in drawing causal inferences from cross-sectional relationships between marriage, motherhood, and wages. We find that heterogeneity leads to biased estimates of the "direct" effects of marriage and motherhood on wages (i.e., effects net of experience and tenure); first-difference estimates reveal no direct effect of marriage or motherhood on women's wages. We also find statistical evidence that experience and tenure may be endogenous variables in wage equations; instrumental variables estimates suggest that both ordinary least squares cross-sectional and first-difference estimates understate the direct (negative) effect of children on wages.
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