Intertemporal Substitution in Maternal Labor Supply: Evidence Using State School Entrance Age Laws

Abstract

I propose a new framework to study the intertemporal labor supply hypothesis. I use an exogenous source of variation in maternal net earning opportunities, generated through school entrance age of children, to study intertemporal labor supply behavior.Employing data from the 1980 US Census and the NLSY, I estimate the e¤ect of a one year delay in school attendance on long run maternal labor supply. IV estimates imply that having a 5 year old enrolled in school increases labor supply measures for married women, with no younger children, by between 7 to 34 percent. Further, using a sample of 7 to 10 year olds from the NLSY, I investigate persistence in employment outcomes for a married mother whose child delayed school entry. Results point towards long run intertemporal substitution in labor supply. Rough calculations yield an uncompensated wage elasticity of 0.76 and an intertemporal elasticity of substitution equal to 1.1.

Delaying School Entry: Short‐ and Longer‐Term Effects on Mothers' Employment

“…Mothers' workforce return may vary at this later stage depending on access to preschool care after school hours and children's age of entry into primary school. Indeed, delayed workforce return for mothers may be an unintended consequence of policy proposals to delay the age of primary school entry for children (Gelbach, ; Fitzpatrick, ; Barua, ).…”