Free DP Download 22 May 2020 - EFFECTS OF INCOME AND TIME OF MOTHERS WORKING DURING PRE-SCHOOL YEARS: Evidence from Norway
MOTHERS WORKING DURING PRESCHOOL YEARS AND CHILD SKILLS. Does income compensate?
Cheti Nicoletti, Kjell G Salvanes, Emma Tominey
CEPR DP No. 14749 | May 2020
Mothers who work during a child’s pre-school years may invest less time in child development, which could lead to a negative effect on mid-childhood and teenage outcomes. But as mothers' work hours increase, income will rise – and new research suggests that this rise in household income fully compensates in the long run for any reduction in mothers’ time investments. The negative effect of an increase in mothers’ hours worked on child outcomes at age 11 is at least partially compensated by the increase in household income, while by age 15, it is fully compensated.
These are the central conclusions of a new CEPR study by Cheti Nicoletti, Kjell Salvanes and Emma Tominey, who use data from every first-born child in Norway between 1997 and 2001 to analyse how an increase in mothers’ labour hours, a reduction in her time investments, and rising income effect long-term child outcomes.
The study finds that an increase in mothers’ hours worked during pre-school years leads to changes in the time allocation of children by replacing the time a mother spends with her child with alternative childcare time. This may create a potential decrease in the total time that the child spends in educational, playing and other activities that are important for child development. Such changes in time investments, conditional on household income, cause a decrease in child’s test scores at age 11 and 15 by around 30-36% of a standard deviation.
But this negative coefficient on mothers’ hours cannot be interpreted as a negative total effect of mothers’ working in pre-school hours. The reason is that household income is a mediator to the effect of mothers’ hours. An increase in mothers’ pre-school hours raises household income, which in turn raises child test score outcomes. In fact, this mediator effect fully compensates for any reduction in mothers’ time investments leading to a total effect of mothers’ hours that is essentially zero.
Although there are differences in the causal effects of hours and household income on child outcomes across child gender, or across mothers’ education, in all cases the total effect of an increase in mothers’ hours is not statistically different to zero.
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