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Intertemporal Substitution in Maternal Labor Supply: Evidence using State School Entrance Age Laws

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  • Barua, Rashmi

Abstract

In this paper, I propose a new framework to study the intertemporal labor supply hypothesis. I use an exogenous source of variation in maternal net earning opportunities, generated through school entrance age of children, to study intertemporal labor supply behavior. Employing data from the 1980 US Census and the NLSY, I estimate the effect of a one year delay in school attendance on long run maternal labor supply. To deal with the endogeneity of school attendance age, I exploit the variation in child month of birth and state kindergarten entrance age laws. IV estimates imply that having a 5 year old enrolled in school increases labor supply measures for married women, with no younger children, by between 7 to 34 percent. In contrast to the results for married mothers, I do not find any statistically significant effect on labor market outcomes for single mothers or mothers of 5 year olds with additional younger children. Further, using a sample of 7 to 10 year olds from the NLSY, I investigate persistence in employment outcomes for a married mother whose child delayed school entry. The estimates suggest that delayed school enrollment has long run implications for maternal labor supply. Results point towards significant intertemporal substitution in labor supply. Rough calculations yield an uncompensated wage elasticity of 0.76 and an intertemporal elasticity of substitution equal to 1.1.

Suggested Citation

  • Barua, Rashmi, 2008. "Intertemporal Substitution in Maternal Labor Supply: Evidence using State School Entrance Age Laws," MPRA Paper 7923, University Library of Munich, Germany.
  • Handle: RePEc:pra:mprapa:7923
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    Cited by:

    1. Francesca Carta & Lucia Rizzica, 2015. "Female employment and pre-kindergarten: on the uninteded effects of an Italian reform," Temi di discussione (Economic working papers) 1030, Bank of Italy, Economic Research and International Relations Area.
    2. Samuel Berlinski & Sebastian Galiani & Patrick J. McEwan, 2011. "Preschool and Maternal Labor Market Outcomes: Evidence from a Regression Discontinuity Design," Economic Development and Cultural Change, University of Chicago Press, vol. 59(2), pages 313-344.
    3. Francesca Carta & Lucia Rizzica, 2016. "Female employment and pre-kindergarten: On the unintended effects of an Italian reform Abstract: We theoretically show that when mothers need to buy childcare services not only if they work but also i," Working Papers 091, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
    4. repec:eee:pubeco:v:158:y:2018:i:c:p:79-102 is not listed on IDEAS

    More about this item

    Keywords

    Maternal labor supply; Kindergarten entry age; intertemporal substitution;

    JEL classification:

    • I20 - Health, Education, and Welfare - - Education - - - General
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
    • J20 - Labor and Demographic Economics - - Demand and Supply of Labor - - - General

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