Maternal Input Choices and Child Cognitive Development : Testing for Reverse Causality

This paper assesses whether the results of child achievement tests affect maternal employment and the child-care choices of mothers with prekindergarten children. To test this hypothesis, it first incorporates into Bernal and Keane’s (2010) model the mother’s imperfect knowledge of the child’s cognitive ability endowment and possible mechanisms through which the mother may learn the child’s endowment. Then it uses a quasi-structural approach to form approximations to the mother’s employment and child-care decision rules and jointly estimate them with the child cognitive development production function and wage equation. Using a sample of single mothers from the NLSY79, it finds evidence that maternal employment and child-care decisions are sensitive to past achievement scores. In particular, a mother whose child has taken the Peabody Picture Vocabulary Test before entering kindergarten and whose child’s standardized test score is above a certain threshold intends to use child care more and work more part-time hours immediately after observing the child’s performance on the achievement test