This study tests the two assumptions underlying popularly held notions that maternal employment negatively affects children because it reduces time spent with parents: (1) that maternal employment reduces children's time with parents, and (2) that time with parents affects child outcomes. We analyze children's time-diary data from the Child Development Supplement of the Panel Study of Income Dynamics and use child fixed-effects and IV estimations to account for unobserved heterogeneity. We find that working mothers trade quantity of time for better “quality” of time. On average, maternal work has no effect on time in activities that positively influence children's development, but it reduces time in types of activities that may be detrimental to children's development. Stratification by mothers’ education reveals that although all children, regardless of mother's education, benefit from spending educational and structured time with their mothers, mothers who are high school graduates have the greatest difficulty balancing work and childcare. We find some evidence that fathers compensate for maternal employment by increasing types of activities that can foster child development as well as types of activities that may be detrimental. Overall, we find that the effects of maternal employment are ambiguous because (1) employment does not necessarily reduce children's time with parents, and (2) not all types of parental time benefit child development.

Significance We find that the Asian-American educational advantage over whites is attributable mainly to Asian students exerting greater academic effort and not to advantages in tested cognitive abilities or socio-demographics. We test explanations for the Asian–white gap in academic effort and find that the gap can be further attributed to ( i ) cultural differences in beliefs regarding the connection between effort and achievement and ( ii ) immigration status. Finally, we highlight the potential psychological and social costs associated with Asian-American achievement success.

Time diaries of sibling pairs from the PSID-CDS are used to determine whether maternal time investments compensate for or reinforce birth-weight differences among children. The findings demonstrate that the direction and degree of differential treatment vary by mother's education. Less-educated mothers devote more total time and more educationally oriented time to heavier-birth-weight children, whereas better-educated mothers devote more total and more educationally oriented time to lower-birth-weight children. The compensating effects observed among highly educated mothers are substantially larger than the reinforcing effects among the least-educated mothers. The findings show that families redistribute resources in ways that both compensate for and exacerbate early-life disadvantages.

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