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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.

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  • 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. Reo Takaku, 2019. "The wall for mothers with first graders: availability of afterschool childcare and continuity of maternal labor supply in Japan," Review of Economics of the Household, Springer, vol. 17(1), pages 177-199, March.
    2. 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.
    3. Graf, Nikolaus & Köppl-Turyna, Monika, 2020. "Längere Öffnungszeiten in der Kinderbetreuung: Effizienzpotenziale nutzen, Leistungen verbessern!," Policy Notes 44, EcoAustria – Institute for Economic Research.
    4. Huang, Cheng & Zhang, Shiying & Zhao, Qingguo, 2020. "The early bird catches the worm? School entry cutoff and the timing of births," Journal of Development Economics, Elsevier, vol. 143(C).
    5. Fiaschi, Davide & Tealdi, Cristina, 2023. "The attachment of adult women to the Italian labour market in the shadow of COVID-19," Labour Economics, Elsevier, vol. 83(C).
    6. 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.
    7. Pihl, Ariel Marek, 2022. "Head Start and mothers’ work: Free child care or something more?," Labour Economics, Elsevier, vol. 75(C).
    8. Selina Gangl & Martin Huber, 2021. "From homemakers to breadwinners? How mandatory kindergarten affects maternal labour market outcomes," Papers 2111.14524, arXiv.org, revised Mar 2022.
    9. Gangl, Selina & Huber, Martin, 2021. "From homemakers to breadwinners? How mandatory kindergarten affects maternal labour market attachment," VfS Annual Conference 2019 (Leipzig): 30 Years after the Fall of the Berlin Wall - Democracy and Market Economy 203636, Verein für Socialpolitik / German Economic Association, revised 2021.
    10. Henrik Kleven & Camille Landais & Johanna Posch & Andreas Steinhauer & Josef Zweimüller, 2024. "Do Family Policies Reduce Gender Inequality? Evidence from 60 Years of Policy Experimentation," American Economic Journal: Economic Policy, American Economic Association, vol. 16(2), pages 110-149, May.
    11. Berthelon, Matias & Kruger, Diana & Lauer, Catalina & Tiberti, Luca & Zamora, Carlos, 2020. "Longer School Schedules, Childcare and the Quality of Mothers’ Employment: Evidence from School Reform in Chile," GLO Discussion Paper Series 525, Global Labor Organization (GLO).
    12. Eckhoff Andresen, Martin & Havnes, Tarjei, 2019. "Child care, parental labor supply and tax revenue," Labour Economics, Elsevier, vol. 61(C).
    13. Francesca Carta, 2019. "Female labour supply in Italy: the role of parental leave and child care policies," Questioni di Economia e Finanza (Occasional Papers) 539, Bank of Italy, Economic Research and International Relations Area.
    14. Francesca Carta & Lucia Rizzica, 2016. "Female employment and pre-kindergarten: On the unintended effects of an Italian reformAbstract: We theoretically show that when mothers need to buy childcare services not only if they work but also if," Working Papers 091, "Carlo F. Dondena" Centre for Research on Social Dynamics (DONDENA), Università Commerciale Luigi Bocconi.
    15. Eiji Yamamura & Yoshiro Tsustsui, 2021. "The impact of closing schools on working from home during the COVID-19 pandemic: evidence using panel data from Japan," Review of Economics of the Household, Springer, vol. 19(1), pages 41-60, March.
    16. Carta, Francesca & Rizzica, Lucia, 2018. "Early kindergarten, maternal labor supply and children's outcomes: Evidence from Italy," Journal of Public Economics, Elsevier, vol. 158(C), pages 79-102.
    17. Matias Berthelon & Diana Kruger & Melanie Oyarzún, 2023. "School schedules and mothers’ employment: evidence from an education reform," Review of Economics of the Household, Springer, vol. 21(1), pages 131-171, March.
    18. Fang, Guanfu & Miao, Liya, 2024. "Expanding boundaries: The Impact of kindergarten availability on women's employment in China," Labour Economics, Elsevier, vol. 88(C).

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    More about this item

    Keywords

    Maternal labor supply; Kindergarten entry age; intertemporal substitution;
    All these keywords.

    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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