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Early child development and parents' labor supply

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  • Lukáš Lafférs
  • Bernhard Schmidpeter

Abstract

The impact of children's early development status on parental labor market outcomes is not well established in the empirical literature. We combine an instrumental variable approach to account for the endogeneity of the development status with a model of nonrandom labor force participation to identify its impact. A one‐unit increase in our poor child development index reduces long‐term maternal weekly hours worked by 9 h and weekly income by A$215. We provide evidence that mothers substitute working time with childcare to compensate for early disadvantages. We do not find any responses of fathers to early child development.

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  • Lukáš Lafférs & Bernhard Schmidpeter, 2021. "Early child development and parents' labor supply," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 36(2), pages 190-208, March.
    • Handle: RePEc:wly:japmet:v:36:y:2021:i:2:p:190-208
    DOI: 10.1002/jae.2803
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    4. Cho, Seungyeon, 2021. "Is handedness exogenously determined? Counterevidence from South Korea," Economics & Human Biology, Elsevier, vol. 43(C).

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    More about this item

    JEL classification:

    • C21 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models
    • I23 - Health, Education, and Welfare - - Education - - - Higher Education; Research Institutions
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • J64 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Unemployment: Models, Duration, Incidence, and Job Search

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