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


Agostinelli, Francesco; Sorrenti, Giuseppe (2018). Money vs. time: family income, maternal labor supply, and child development. Working paper series / Department of Economics 273, University of Zurich.

Abstract

We study the effect of family income and maternal hours worked on child development. Our instrumental variable analysis suggests different results for cognitive and behavioral development. An additional 1,000 USD in family income improves cognitive development by 4.4 percent of a standard deviation but has no effect on behavioral development. A yearly increase of 100 work hours negatively affects both outcomes by approximately 6 percent of a standard deviation. The quality of parental investment matters and the substitution effect (less parental time) dominates the income effect (higher earnings) when the after-tax hourly wage is below 13.50 USD. Results call for consideration of child care and minimum wage policies that foster both maternal employment and child development.

Abstract

We study the effect of family income and maternal hours worked on child development. Our instrumental variable analysis suggests different results for cognitive and behavioral development. An additional 1,000 USD in family income improves cognitive development by 4.4 percent of a standard deviation but has no effect on behavioral development. A yearly increase of 100 work hours negatively affects both outcomes by approximately 6 percent of a standard deviation. The quality of parental investment matters and the substitution effect (less parental time) dominates the income effect (higher earnings) when the after-tax hourly wage is below 13.50 USD. Results call for consideration of child care and minimum wage policies that foster both maternal employment and child development.

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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
Language:English
Date:January 2018
Deposited On:12 Jan 2018 16:44
Last Modified:30 Jul 2018 05:25
Series Name:Working paper series / Department of Economics
Number of Pages:76
ISSN:1664-7041
OA Status:Green
Official URL:http://www.econ.uzh.ch/static/wp/econwp273.pdf
Related URLs:http://www.econ.uzh.ch/static/workingpapers.php

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