Working Paper: NBER ID: w24740
Authors: Ilyana Kuziemko; Jessica Pan; Jenny Shen; Ebonya Washington
Abstract: The birth of a first child is a major life transition, particularly for women, and recent work documents it still leads to large declines in female labor supply. We make three related arguments about women's ability to predict the effects of motherhood on their employment. First, we present a variety of evidence from the US and UK that modern cohorts of women underestimate these effects. This underestimate is largest for those with college degrees and who themselves had working mothers. We show that this optimism about post-baby working life is new; earlier cohorts of mothers underestimated their post-baby labor supply. Second, an important implication of this finding is that, at the time they are making decisions over post-secondary education, young women underestimate the probability they will be stay-at-home mothers. This underestimation thus provides a potential resolution to the puzzle of why, despite plateauing labor-force attachment since 1990, women in the US continue to increase human-capital investment. Third, we explain why women today underestimate maternal employment costs using a two-generation model alongside evidence that the costs have recently increased after decades of decline. In our model, women, especially those who saw their own mothers work, invest in human capital under the assumption that the employment costs of motherhood would continue to fall.We show that roughly in the 1980s, however, key costs begin to rise.
Keywords: motherhood; employment; labor supply; human capital; gender roles
JEL Codes: J13; J16; J22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| underestimation of costs (O22) | decisions regarding human capital investment (J24) |
| decisions regarding human capital investment (J24) | labor supply realities post-baby (J22) |
| motherhood (J13) | decline in female labor supply (J21) |
| modern cohorts of women (J16) | underestimate employment costs (J39) |
| rising costs of motherhood (J13) | misalignment in expectations (D84) |
| educational attainment (I21) | moderation of employment effects of motherhood (J22) |
| maternal employment history (J22) | moderation of employment effects of motherhood (J22) |