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Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size

  • Joshua D. Angrist
  • William N. Evans

Although theoretical models of labor supply and the family are well developed, there are few credible estimates of key empirical relationships in the work-family nexus. This study uses a new instrumental variable, the sex composition of the first two births in families with at least two children, to estimate the effect of additional children on parents' labor supply. Instrumental variables estimates using the sex mix are substantial but smaller than the corresponding ordinary least squares (OLS) estimates. Moreover, unlike the OLS estimates, the female labor supply effects estimated using sex-mix instruments appear to be absent among more educated women and women with high-wage husbands. We also find that married women who have a third child reduce their labor supply by as much as women in the full sample, while there is no relationship between wives' child-bearing and husbands' labor supply. Finally results to estimates produced using twins to generate instruments. Estimates using twins instruments are very close to the estimates generated by sex-mix instruments, once the estimators are corrected for differences in the ages of children whose birth was caused by the instruments. The estimates imply that the labor supply consequences of child-bearing disappear by the time the child is about 13 years old.

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Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5778.

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Date of creation: Sep 1996
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Publication status: published as American Economic Review (June 1998).
Handle: RePEc:nbr:nberwo:5778
Note: LS
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  10. Joyce P. Jacobsen & James Wishart Pearce III & Joshua L. Rosenbloom, 1999. "The Effects of Childbearing on Married Women's Labor Supply and Earnings: Using Twin Births as a Natural Experiment," Journal of Human Resources, University of Wisconsin Press, vol. 34(3), pages 449-474.
  11. Gronau, Reuben, 1973. "The Effect of Children on the Housewife's Value of Time," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages S168-99, Part II, .
  12. Iacovou, Maria, 2001. "Fertility and female labour supply," ISER Working Paper Series 2001-19, Institute for Social and Economic Research.
  13. Becker, Gary S & Landes, Elisabeth M & Michael, Robert T, 1977. "An Economic Analysis of Marital Instability," Journal of Political Economy, University of Chicago Press, vol. 85(6), pages 1141-87, December.
  14. Joshua Angrist & Alan Krueger, 1990. "Does Compulsory School Attendance Affect Schooling and Earnings?," Working Papers 653, Princeton University, Department of Economics, Industrial Relations Section..
  15. Pencavel, John, 1987. "Labor supply of men: A survey," Handbook of Labor Economics, in: O. Ashenfelter & R. Layard (ed.), Handbook of Labor Economics, edition 1, volume 1, chapter 1, pages 3-102 Elsevier.
  16. Imbens, Guido W & Angrist, Joshua D, 1994. "Identification and Estimation of Local Average Treatment Effects," Econometrica, Econometric Society, vol. 62(2), pages 467-75, March.
  17. Reuben Gronau, 1982. "Sex-Related Wage Differentials and Women's Interrupted Labor Careers--The Chicken or the Egg," NBER Working Papers 1002, National Bureau of Economic Research, Inc.
  18. Sanders Korenman & David Neumark, 1990. "Marriage, Motherhood, and Wages," NBER Working Papers 3473, National Bureau of Economic Research, Inc.
  19. Butcher, Kristin F & Case, Anne, 1994. "The Effect of Sibling Sex Composition on Women's Education and Earnings," The Quarterly Journal of Economics, MIT Press, vol. 109(3), pages 531-63, August.
  20. Robert Kaestner, 1997. "Are Brothers Really Better? Sibling Sex Composition and Educational Achievement Revisited," Journal of Human Resources, University of Wisconsin Press, vol. 32(2), pages 250-284.
  21. Ben-Porath, Yoram & Welch, Finis, 1976. "Do Sex Preferences Really Matter?," The Quarterly Journal of Economics, MIT Press, vol. 90(2), pages 285-307, May.
  22. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
  23. Joshua D. Angrist & Victor Lavy, 1996. "The Effect of Teen Childbearing and Single Parenthood on Childhood Disabilities and Progress in School," NBER Working Papers 5807, National Bureau of Economic Research, Inc.
  24. Rosenzweig, Mark R & Wolpin, Kenneth I, 1980. "Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment," Econometrica, Econometric Society, vol. 48(1), pages 227-40, January.
  25. Bronars, Stephen G & Grogger, Jeff, 1994. "The Economic Consequences of Unwed Motherhood: Using Twin Births as a Natural Experiment," American Economic Review, American Economic Association, vol. 84(5), pages 1141-56, December.
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  27. J.D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
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