Money vs. time: family income, maternal labor supply, and child development
Francesco Agostinelli and
Giuseppe Sorrenti ()
No 273, ECON - Working Papers from Department of Economics - University of Zurich
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 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. Results call for consideration of child care and minimum wage policies that foster both maternal employment and child development.
Keywords: Child development; family income; maternal labor supply (search for similar items in EconPapers)
JEL-codes: H24 H31 I21 I38 J13 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-dem and nep-lma
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Working Paper: Money vs. Time: Family Income, Maternal Labor Supply, and Child Development (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:zur:econwp:273
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