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Decomposing the effects of children's health on mother's labor supply: is it time or money?

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  • Elise Gould

    (Economic Policy Institute, Washington, USA)

Abstract

In this paper, I explore how children's health influences the wages and work hours of their mother. Some children have illnesses that require expensive medicine or treatment, but demand little parental time. Others require extraordinary amounts of time; and still others require care at unpredictable times of the day. I construct a theoretical model of mother's labor supply that explicitly incorporates the financial and time costs associated with the presence of unhealthy children. The model predicts that children with time-intensive illnesses and those with unpredictable illnesses negatively influence mother's labor supply, whereas children with illnesses with a strong financial component have a positive effect on mother's labor supply. In order to empirically test this, I organize a focus group of doctors to categorize illnesses and disabilities by the type of resources they require. Using the 1997 PSID Child Development Supplement, I estimate the effects of these requirements on mother's decision to work and work hours. After controlling for the financial burden of the illness, single mothers work fewer hours if their child has a time-intensive illness and married mothers are less likely to work and work fewer hours if their child has a severe condition with an unpredictable time component. These findings are consistent with the theoretical model and highlight the need to decompose the effects of child health on mother's work status. Model specifications that aggregate across illnesses are incapable of disentangling these effects and may therefore underestimate the welfare costs of having a sick child in the family. Copyright © 2004 John Wiley & Sons, Ltd.

Suggested Citation

  • Elise Gould, 2004. "Decomposing the effects of children's health on mother's labor supply: is it time or money?," Health Economics, John Wiley & Sons, Ltd., vol. 13(6), pages 525-541.
  • Handle: RePEc:wly:hlthec:v:13:y:2004:i:6:p:525-541
    DOI: 10.1002/hec.891
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    File URL: http://hdl.handle.net/10.1002/hec.891
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    References listed on IDEAS

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    Cited by:

    1. Cowling, Marc, 2007. "Still At Work? An empirical test of competing theories of long hours culture," MPRA Paper 1614, University Library of Munich, Germany.
    2. Zeng-Hua Lu & Alec Zuo, 2010. "Effects Of A Child'S Disability On Affected Female'S Labour Supply In Australia," Australian Economic Papers, Wiley Blackwell, vol. 49(3), pages 222-240, September.
    3. repec:pri:crcwel:wp12-03-ff is not listed on IDEAS
    4. Marah A. Curtis & Hope Corman & Kelly Noonan & Nancy E. Reichman, 2012. "Life Shocks and Homelessness," Working Papers 1374, Princeton University, Woodrow Wilson School of Public and International Affairs, Center for Research on Child Wellbeing..
    5. Patrick Richard, 2016. "Children’s Mental Disorders and Their Mothers’ Earnings: Implications for the Affordable Care Act of 2010," Journal of Family and Economic Issues, Springer, vol. 37(2), pages 156-171, June.
    6. repec:bla:devpol:v:35:y:2017:i:2:p:263-287 is not listed on IDEAS
    7. Wasi, Nada & den Berg, Bernard van & Buchmueller, Thomas C., 2012. "Heterogeneous effects of child disability on maternal labor supply: Evidence from the 2000 US Census," Labour Economics, Elsevier, vol. 19(1), pages 139-154.
    8. Diego Amador & Mónica Pinilla-Roncancio, 2017. "The Effect of Child Disability on Parents' Labour Supply: Evidence from Colombia," DOCUMENTOS CEDE 015467, UNIVERSIDAD DE LOS ANDES-CEDE.
    9. Peter Burton & Kelly Chen & Lynn Lethbridge & Shelley Phipps, 2017. "Child health and parental paid work," Review of Economics of the Household, Springer, vol. 15(2), pages 597-620, June.
    10. DeRigne, LeaAnne & Porterfield, Shirley, 2010. "Employment change and the role of the medical home for married and single-mother families with children with special health care needs," Social Science & Medicine, Elsevier, vol. 70(4), pages 631-641, February.
    11. Hope Corman & Kelly Noonan & Nancy E. Reichman, 2005. "Mother's Labor Supply in Fragile Families: The Role of Child Health," Eastern Economic Journal, Eastern Economic Association, vol. 31(4), pages 601-616, Fall.
    12. Meng-Wen Tsou & Jin-Tan Liu & Kuang-Hsien Wang, 2014. "Impact of Low Birth Weight Child on Maternal Labour Force Participation: Evidence from Taiwan," Pacific Economic Review, Wiley Blackwell, vol. 19(4), pages 483-501, October.
    13. Mahmud, Mir, 2016. "Child Disability, Children’s Time with Mother and Maternal Employment," MPRA Paper 72816, University Library of Munich, Germany.
    14. Anette Primdal Kvist & Helena Skyt Nielsen & Marianne Simonsen, 2011. "The effects of Children’s ADHD on Parents’ Relationship Dissolution and Labor Supply," Economics Working Papers 2011-14, Department of Economics and Business Economics, Aarhus University.
    15. Paul Frijters & David W. Johnston & Manisha Shah & Michael A. Shields, 2009. "To Work or Not to Work? Child Development and Maternal Labor Supply," American Economic Journal: Applied Economics, American Economic Association, vol. 1(3), pages 97-110, July.
    16. Jason Fletcher & Nicole Hair & Barbara Wolfe, 2012. "Am I my Brother's Keeper? Sibling Spillover Effects: The Case of Developmental Disabilities and Externalizing Behavior," CEPR Discussion Papers 668, Centre for Economic Policy Research, Research School of Economics, Australian National University.
    17. Morrill, Melinda Sandler, 2011. "The effects of maternal employment on the health of school-age children," Journal of Health Economics, Elsevier, vol. 30(2), pages 240-257, March.
    18. Nils Braakmann, 2014. "The consequences of own and spousal disability on labor market outcomes and subjective well-being: evidence from Germany," Review of Economics of the Household, Springer, vol. 12(4), pages 717-736, December.
    19. Jason Fletcher & Marsha Mailick & Jieun Song & Barbara Wolfe, 2013. "A Sibling Death in the Family: Common and Consequential," Demography, Springer;Population Association of America (PAA), vol. 50(3), pages 803-826, June.
    20. repec:afe:journl:v:19:y:2017:i:1:p:27-60 is not listed on IDEAS
    21. Marah Curtis & Hope Corman & Kelly Noonan & Nancy Reichman, 2013. "Life Shocks and Homelessness," Demography, Springer;Population Association of America (PAA), vol. 50(6), pages 2227-2253, December.

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