The Cash Opportunity of Childbearing: An Approach Using British Data

Heather Joshi

No 208, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The opportunity costs of rearing British children, in terms of cash earnings forgone by their mother, are estimated for a typical family. Data from the 1980 Women and Employment Survey provide estimates for hourly pay as a function of work experience and current hours of work. In addition, these data are used to generate participation and hours profiles for representative women with different numbers of children. These are then combined with the earnings function to simulate lifetime income. The simulations indicate that the earnings forgone as a result of bearing and rearing two children can be decomposed into three effects, of approximately equal magnitude: on participation, hours and pay. These effects exceed the direct costs of children and do not rise proportionally with family size. In addition, forgone earnings are sensitive to the spacing of births but not (undiscounted) to the timing of the first birth. The methodology and results of these simulations contrast markedly with those of a similar study of United States women. We argue that the non-linearity of the earnings function in our study and state dependence in British labour force transitions violate the assumptions of the multi-state labour force life-table on which the United States study was based.

Keywords: Child Care; Earnings Function; Fertility; Human Capital; Labour Supply; Lifetime Income (search for similar items in EconPapers)
Date: 1987-12
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.cepr.org/active/publications/discussion_papers/dp.php?dpno=208 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cpr:ceprdp:208

Ordering information: This working paper can be ordered from
http://www.cepr.org/ ... pers/dp.php?dpno=208

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().