Maternal Labor Supply and Children's Cognitive Development

This paper analyzes the relationship between maternal labor supply and children's cognitive development, using a sample of three- and four-year-old children of female respondents from the 1986 National Longitudinal Surveys Youth Cohort (NLSY). Respondents in the NLSY were aged 21 to 29 in 1986; thus our sample consists of children of relatively young mothers. We show that for this group the impact of maternal labor supply depends upon when it occurs. Maternal employment is found to have a negative impact when it occurs during the first year of the child's life and a potentially offsetting positive effect when it occurs during the second and subsequent years. We find some evidence that boys are more sensitive to maternal labor supply than girls though the gender difference is not significant. The negative first-year effect is not mitigated to any great extent by the increased maternal income that accompanies it, though the increase in maternal income does appears to play an important role in producing the positive effect in the second and later years.