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Money vs. time: family income, maternal labor supply, and child development


Agostinelli, Francesco; Sorrenti, Giuseppe (2021). Money vs. time: family income, maternal labor supply, and child development. Working paper series / Department of Economics 273, University of Zurich.

Abstract

This paper analyzes the relationship between work-promoting policies and child development. First, we provide new comprehensive evidence of the unintended consequences for child development of the Earned Income Tax Credit expansions during the 1990s in the United States. Second, our theory-driven empirical model reconciles this result by shedding light on the trade-off between the income effect (economic resources) and the substitution effect (time and quality of the parent-child interactions) on a child's cognitive and behavioral development. This money versus time trade-off is most pronounced for disadvantaged mothers. Overall, our results call for a policy debate on how to design targeted supplements for disadvantaged families to support working mothers and their children.

Abstract

This paper analyzes the relationship between work-promoting policies and child development. First, we provide new comprehensive evidence of the unintended consequences for child development of the Earned Income Tax Credit expansions during the 1990s in the United States. Second, our theory-driven empirical model reconciles this result by shedding light on the trade-off between the income effect (economic resources) and the substitution effect (time and quality of the parent-child interactions) on a child's cognitive and behavioral development. This money versus time trade-off is most pronounced for disadvantaged mothers. Overall, our results call for a policy debate on how to design targeted supplements for disadvantaged families to support working mothers and their children.

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Additional indexing

Item Type:Working Paper
Communities & Collections:03 Faculty of Economics > Department of Economics
Working Paper Series > Department of Economics
Dewey Decimal Classification:330 Economics
JEL Classification:H24, H31, I21, I38, J13, J22
Uncontrolled Keywords:Child development, family income, maternal labor supply, Kognitive Entwicklung, Verhaltensentwicklung, Arbeitsangebot, Mutter, Einkommen, Kinderbetreuung, Mindestlohn
Language:English
Date:February 2021
Deposited On:12 Jan 2018 16:44
Last Modified:16 Mar 2022 08:04
Series Name:Working paper series / Department of Economics
Number of Pages:63
ISSN:1664-7041
Additional Information:Revised version
OA Status:Green
Official URL:https://www.econ.uzh.ch/en/research/workingpapers.html?paper-id=952
  • Content: Updated Version
  • Language: English
  • Description: Revised version February 2021
  • Content: Published Version
  • Language: English
  • Permission: Download for registered users
  • Description: Version January 2018