Mother's Time Allocation, Child Care and Child Cognitive Development

This paper analyzes the effects of maternal employment and non-parental child care on child cognitive development, taking into account the mother's time allocation between leisure and child-care time. I estimate a behavioral model, in which maternal labor supply, non-parental child care, goods expenditure and time allocation decisions are considered to be endogenous choices of the mother. The child cognitive development depends on maternal and non-parental child care and on the goods bought for the child. The model is estimated using US data from the Child Development Supplement and the Time Diary Section of the Panel Study of Income Dynamics. The results show that the productivity of mother's child-care time substantially differs by a mother's level of education. Moreover, the child-care time of college-educated mothers is more productive than non-parental child care. The simulation of maternity leave policies, mandating mothers not to work in the first two years of the child's life, reveals that the impact on the child's test score at age five is either positive or negative, depending on whether the leave is paid or not. The heterogeneous productivity of mothers' time leads to different allocation choices between child care and leisure: college-educated mothers re-allocate a larger fraction of their time out of work to child care than do the lower educated, while the opposite holds for leisure.