To Grandmother’s House We Go: Childcare Time Transfers and Female Labor Mobility

Women in the United States frequently rely on childcare from extended family but can only do so if they live in the same location as them. This paper studies how child care costs, the location of extended family, and fertility events influence both the labor force attachment and labor mobility of women in the United States. We begin by empirically documenting strong patterns of women returning to their home locations in anticipation of fertility events, indicating that the desire for intergenerational time transfers is an important motivator of home migration. Moreover, women who reside in their parent’s location experience a substantial long-run reduction in their child earnings penalty. Next, we build a dynamic model of labor force participation and migration to assess the incidence of counterfactual scenarios and childcare policies. We find that childcare subsidies increase lifetime earnings and labor mobility for women, with particularly strong effects for women who are ever single mothers and Blacks. Ignoring migration can understate the welfare benefits of these policies by a meaningful extent.