Unconstrained Choices? Understanding the Post-Birth Decline in Working Hours of Highly Educated Mothers

This paper investigates the respective roles of labor market constraints, childcare constraints, and maternal preferences in driving both the post-childbirth drop in mothers’ working hours and their limited responsiveness to family policies. We develop a labor supply model that incorporates preferences for maternal care and conduct a survey of 1,400 highly educated women. We find that a substantial share of the post-birth decline in hours worked reflects unconstrained choices, suggesting that the reduction in hours for this group is unlikely to be dropped by policies that solely target constraints. We show that while both labor market and childcare constraints shape mothers’ working hours, their effects are heterogeneous and, on average, offsetting, as constraints lead some women to work less than they would like, but others to work more. Consistent with the literature, we find that childcare subsidies have no net effect on hours worked, as heterogeneous constraint effects lead to varied positive and negative responses to the policy, which cancel each other out. Yet, these policies do effectively relax childcare constraints, thereby aligning actual drop in labor supply more closely with mothers’ preferences. Finally, we examine the role of social norms and beliefs and find that perceived returns to maternal care on child well-being significantly influence mothers’ preferences to stay at home.