The Effects of Women’s Employment and Fertility Decisions on the Cognitive Development of Young Children: The Role of Mother’s Education

Frank Heiland, Florida State University

This paper investigates the effects of maternal time and family resources on children's cognitive development. Existing studies suggest that mothers' time spent in the labor market during the first year after the child's birth has adverse effects on the cognitive development of preschoolers. Employment during the second and third year, however, is found to be beneficial. Using a larger sample of children (NLSY79) than previous work, a behaviorally founded specification and interpretation, and controlling for endogeneity of labor supply, income, and family size, I find that the amount of time a mother spends in the labor market in the first year or subsequently has on average no statistically significant effect on the cognitive development of white (non-Hispanic), African American, or Hispanic children. Further analysis of the sample of white children reveals that maternal employment in the first year after birth is only detrimental for children of less-educated (hence poorer) women.