Working Papers in Economics,
University of Gothenburg, Department of Economics

Abstract: This paper analyzes the effects of maternal employment and non-parental child care on child cognitive development, taking into account the mother's time allocation between leisure and child-care time. I estimate a behavioral model, in which maternal labor supply, non-parental child care and time allocation decisions are considered to be endogenous choices of the mother, and the child cognitive development depends on maternal and non-parental child care. The results show that the mother's child-care time is more productive than non-parental child care, at any age of the child. This implies that a reduction in a mother's child-care time, induced by a higher labor supply, may not be compensated for by the increase in non-parental child care use, and, hence, may lead to a negative effect on the child's cognitive ability. The estimation of a counterfactual model where a mother can only allocate her time between child care and work shows that neglecting the mother's time allocation choice between child care and leisure overestimates the productivity of a mother's time with the child.

Keywords: mother employment; mother time allocation; non-parental child care; child development; structural estimation

JEL-codes: C15; D13; J13; J22

48 pages, February 28, 2017

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