The rising costs of childcare pose challenges for families, leading to difficult choices including those impacting mothers' labor force participation. This paper investigates the relationship between childcare costs and maternal employment. Using data from the National Database of Childcare Prices, the American Community Survey, and the Longitudinal Employer Household Dynamics, we estimate the impact of childcare costs on mothers' labor force participation through two empirical strategies. A fixed-effects approach controls for geographic and temporal heterogeneity in costs as well as mothers' idiosyncratic preferences for work and childcare, while an instrumental variables approach addresses the endogeneity of mothers' preferences for work and childcare by leveraging exogenous geographic and temporal variation in childcare licensing requirements. Our findings across both research designs indicate that higher childcare costs reduce labor force participation among mothers, with lower-income mothers exhibiting greater responsiveness to changes in childcare costs.
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Preschoolers Enrolled and Mothers at Work? The Effects of Universal Pre-Kindergarten
March 2008
Working Paper Number:
CES-08-04
Three states (Georgia, Oklahoma and Florida) recently introduced Universal Pre- Kindergarten (Universal Pre-K) programs offering free preschool to all age-eligible children, and policy makers in many other states are promoting similar policies. How do such policies affect the participation of children in preschool programs (or do they merely substitute for preschool offered by the market)? Does the implicit child care subsidy afforded by Universal Pre-K change maternal labor supply? I present a model that includes preferences for child quality and shows the directions of change in preschool enrollment and maternal labor supply in response to Universal Pre-K programs are theoretically ambiguous. Using restricted-access data from the Census, together with year and birthday based eligibility cutoffs, I employ a regression discontinuity framework to estimate the effects of Universal Pre-K availability. Universal Pre-K availability increases preschool enrollment by 12 to 15 percent, with the largest effect on children of women with less than a Bachelor's Degree. Universal Pre-K availability has little effect on the labor supply of most women. However, women residing in rural areas in Georgia increase their children's preschool enrollment and their own employment by 22 and 20 percent, respectively, when Universal Pre-K is available.
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Cheaper by the Dozen: Using Sibling Discounts at Catholic Schools to Estimate the Price Elasticity of Private School Attendance
October 2011
Working Paper Number:
CES-11-34
The effect of vouchers on sorting between private and public schools depends upon the price elasticity of demand for private schooling. Estimating this elasticity is empirically challenging because prices and quantities are jointly determined in the market for private schooling. We exploit a unique and previously undocumented source of variation in private school tuition to estimate this key parameter. A majority of Catholic elementary schools offer discounts to families that enroll more than one child in the school in a given year. Catholic school tuition costs therefore depend upon the interaction of the number and spacing of a family's children with the pricing policies of the local school. This within-neighborhood variation in tuition prices allows us to control for unobserved determinants of demand with a fine set of geographic fixed effects, while still identifying the price parameter. We use data from 3700 Catholic schools, matched to restricted Census data that identifies geography at the block level. We find that a standard deviation decrease in tuition prices increases the probability that a family will send its children to private school by one-half percentage point, which translates into an elasticity of Catholic school attendance with respect to tuition costs of -0.19. Our subgroup results suggest that a voucher program would disproportionately induce into private schools those who, along observable dimensions, are unlike those who currently attend private school.
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Childhood Housing and Adult Earnings: A Between-Siblings Analysis of Housing Vouchers and Public Housing
January 2013
Working Paper Number:
CES-13-48RR
To date, research on the long-term effects of childhood participation in voucher-assisted and public housing has been limited by the lack of data and suitable identification strategies. We create a national level longitudinal data set that enables us to analyze how children's housing experiences affect adult earnings and incarceration rates. While naive estimates suggest there are substantial negative consequences to childhood participation in voucher assisted and public housing, this result appears to be driven largely by selection of households into housing assistance programs. To mitigate this source of bias, we employ household fixed-effects specifications that use only within-household (across-sibling) variation for identification. Compared to naive specifications, household fixed-effects estimates for earnings are universally more positive, and they suggest that there are positive and statistically significant benefits from childhood residence in assisted housing on young adult earnings for nearly all demographic groups. Childhood participation in assisted housing also reduces the likelihood of incarceration across all household race/ethnicity groups. Time spent in voucher-assisted or public housing is especially beneficial for females from non-Hispanic Black households, who experience substantial increases in expected earnings and lower incarceration rates.
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Divorce, Family Arrangements, and Children's Adult Outcomes
May 2025
Working Paper Number:
CES-25-28
Nearly a third of American children experience parental divorce before adulthood. To understand its consequences, we use linked tax and Census records for over 5 million children to examine how divorce affects family arrangements and children's long-term outcomes. Following divorce, parents move apart, household income falls, parents work longer hours, families move more frequently, and households relocate to poorer neighborhoods with less economic opportunity. This bundle of changes in family circumstances suggests multiple channels through which divorce may affect children's development and outcomes. In the years following divorce, we observe sharp increases in teen births and child mortality. To examine long-run effects on children, we compare siblings with different lengths of exposure to the same divorce. We find that parental divorce reduces children's adult earnings and college residence while increasing incarceration, mortality, and teen births. Changes in household income, neighborhood quality, and parent proximity account for 25 to 60 percent of these divorce effects.
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Introduction of Head Start and Maternal Labor Supply: Evidence from a Regression
Discontinuity Design
January 2016
Working Paper Number:
CES-16-35
I use the non-public decennial censuses in 1970 to investigate the effect of the Head Start program on maternal labor supply and schooling in its early years. I exploit a discontinuity in county-level Head Start funding beginning in the late 1960s to explore differences in countylevel maternal employment and maternal schooling. The results provide suggestive evidence that the more availability of Head Start led to an increase the nursery school enrollment of children and a decrease in maternal labor supply. In addition, the ITT estimates imply a relatively large, negative effect of enrollment on maternal labor supply. However, the estimates are somewhat sensitive to addition of covariates and the standard errors are also large to draw firm inferences.
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The Impact of Minimum Quality Standards on Firm Entry, Exit and Product Quality: The Case of the Child Care Market
December 2005
Working Paper Number:
CES-05-28
We examine the impact of minimum quality standards on the supply side of the child care market, using a unique panel data set merged from the Census of Services Industries, state regulation data, and administrative accreditation records from the National Association of Education for Young Children. We control for state-specific and time-specific fixed effects in order to mitigate the biases associated with policy endogeneity. We find that the effects of quality standards specifying the labor intensiveness of child care services are strikingly different from those specifying staff qualifications. Higher staff-child ratio requirements deter entry and reduce the number of operating child care establishments. This entry barrier appears to select establishments with better quality into the market and alleviates competition among existing establishments: existing establishments are more likely to receive accreditation and higher profits, and are less likely to exit. By contrast, higher staff-education requirements do not have entry-deterrence effects. They do have the unintended effects of discouraging accreditation, reducing owners' profits, and driving firms out of businesses.
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Income Effects in Labor Supply: Evidence from Child-Related Tax Benefits
May 2016
Working Paper Number:
CES-16-24
A parent whose child is born in December can claim child-related tax benefits when she files her tax return a few months later. Parents of children born in January must wait more than a year before they can receive child-related tax benefits. As a result, families with December births have higher after-tax income in the first year of a child's life than otherwise similar families with January births. This paper estimates the corresponding income effect on maternal labor supply, testing whether mothers who give birth in December work and earn less in the months following birth. We use data from the American Community Survey, the Survey of Income and Program Participation, and the 2000 Decennial Census. We find that December mothers have a lower probability of working, particularly in the third month after a child's birth. Earnings data from the SIPP indicate that an additional dollar of child-related tax benefits reduces annual maternal earnings in the year following a child's birth by approximately one dollar.
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The Children of HOPE VI Demolitions: National Evidence on Labor Market Outcomes
November 2020
Working Paper Number:
CES-20-39
We combine national administrative data on earnings and participation in subsidized housing to study how the demolition of 160 public housing projects'funded by the HOPE VI program'affected the adult labor market outcomes for 18,500 children. Our empirical strategy compares children exposed to the program to children drawn from thousands of non-demolished projects, adjusting for observable differences using a flexible estimator that combines features of matching and regression. We find that children who resided in HOPE VI projects earn 14% more at age 26 relative to children in comparable non-HOPE VI projects. These earnings gains are strongest for demolitions in large cities, particularly in neighborhoods with higher pre-demolition poverty rates and lower pre-demolition job accessibility. There is no evidence that the labor market gains are driven by improvements in household or neighborhood environments that promote human capital development in children. Rather, subsequent improvements in job accessibility represent a likely pathway for the results.
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Maternal Labor Dynamics: Participation, Earnings, and Employer Changes
December 2019
Working Paper Number:
CES-19-33
This paper describes the labor dynamics of U.S. women after they have had their first and subsequent children. We build on the child penalty literature by showing the heterogeneity of the size and pattern of labor force participation and earnings losses by demographic characteristics of mothers and the characteristics of their employers. The analysis uses longitudinal administrative earnings data from the Longitudinal Employer-Household Dynamics database combined with the Survey of Income and Program Participation survey data to identify women, their fertility timing, and employment. We find that women experience a large and persistent decrease in earnings and labor force participation after having their first child. The penalty grows over time, driven by the birth of subsequent children. Non-white mothers, unmarried mothers, and mothers with more education are more likely to return to work following the birth of their first child. Conditional on returning to the labor force, women who change employers earn more after the birth of their first child than women who return to their pre-birth employers. The probability of returning to the pre-birth employer and industry is heterogeneous over both the demographics of mothers and the characteristics of their employers.
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The Impact of Welfare Waivers on Female Headship Decisions
February 2003
Working Paper Number:
CES-03-03
While much of the focus of recent welfare reforms has been on moving recipients from welfare to work, many reforms were also directed at affecting decisions about living arrangements, pregnancy, marriage and cohabitation. This paper focuses on women's decisions to become or remain unmarried mothers, that is, female heads of families. We assess the impact of welfare reform waivers on those decisions while controlling for confounding local economic and social contextual conditions. We pool the 1990, 1992, and 1993 panels of the Survey of Income and Program Participation (SIPP) which span the calendar time when many states began adopting welfare waivers. For its descriptors of local labor market conditions, the project uses skill specific measures of wages and employment opportunities for counties. We estimate models for levels of female headship and proportional hazard models for entry and exit from female headship. In the hazards, we employ stratified Cox partial likelihood methods and investigate the use of state fixed effects or state stratified hazard models to control for unmeasured state influences. Based on data through 1995, we find limited evidence that workencouraging waivers had a beneficial effect by reducing female headship of families. We find little evidence that family caps, teenage coresidence requirements or termination limits will reduce the number of single-parent families.
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