Causal Effects of Maternal Time-Investment on Children's Cognitive Outcomes

Many social scientists hypothesize that the time mothers spend with their children is crucial for children's cognitive development. Unlike most studies that focus on maternal employment effects on children, we estimate direct causal effects of time-diary measured maternal time using the Child Development Supplement (CDS) - Panel Study of Income Dynamics (PSID) data set. Considering endogeneity and using different instruments, the effect of an increase of mother's time associated to a rise in her opportunity cost of time is an order of magnitude larger than OLS estimates for cognitive tests. These effects are greater for white children living with college-educated mothers in two-parent households