Delaying Fertility, Advancing Careers: The Lasting Consequences of Growing Up with a Safety Net

Matias Giaccobasso

No 26139, RFBerlin Discussion Paper Series from ROCKWOOL Foundation Berlin (RFBerlin)

Abstract: How early-life income shapes women's life trajectories is central to understanding social mobility and gender inequality. This paper shows that income support during childhood delays motherhood, promotes early labor market participation, and ultimately leads to higher cumulative earnings and improved living standards. The analysis draws on eighteen years of administrative records and implements a regression discontinuity design that exploits an arbitrary eligibility rule in a large-scale, government-implemented cash transfer program in Uruguay. An additional USD 1,000 of income support during childhood, corresponding to a 13.3% increase in cumulative transfers, increases women's total months of formal employment by 2.5 (6.8%) and cumulative earnings by USD 1,740 (7.0%), with outcomes observed on average at age 28. These gains operate through changes in transitions to adulthood: an additional USD 1,000 of benefits increases the probability of a career-oriented transition by 3.4 percentage points (14.2%), explained by a reduction in the probability of a teen birth of 2.5 p.p. (11.6%), an increase in the probability of being employed by age 19 of 2.3 p.p. (13.4%), and an increase in tertiary education enrollment of 0.9 p.p. (8.1%). These changes place women on later fertility paths with smaller and less persistent child penalties. A Marginal Value of Public Funds analysis shows that, through increased future payroll tax revenues, the program fully pays for itself by age 37 and generates approximately USD 2.4 in government revenue per dollar transferred over the life cycle. Overall, these results show that income support during childhood can reshape women's fertility timing and early career trajectories, promoting social mobility and reducing gender inequality.

Keywords: Income support; fertility timing; labor markets; gender inequality. (search for similar items in EconPapers)
JEL-codes: H53 I38 J13 J16 J22 (search for similar items in EconPapers)
Date: 2026-05
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Persistent link: https://EconPapers.repec.org/RePEc:crm:wpaper:26139

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