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Childbearing and Wives' Foregone Earnings

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This paper combines multi-state life-table analysis and the human capital model of wages to derive new estimates of the impact of children on hours of market work and earnings for American women aged 15 to 55. Panel data from the National Longitudinal Surveys of Labor Market Experience are used to estimate multi-state tables of working life and to assess the impact of fertility on female labour force behaviour. Potential earnings based on a human capital wage model are combined with the working life histories implied by the life-table analysis to estimate opportunity expenditures (i.e. the money value of foregone employment opportunities) associated with different childbearing patterns. The impacts of race, school enrolment, educational attainment, marital status, marital status changes, birth cohort and fertility are considered. Some specific findings are: (1) with identical childbearing patterns, white women forego roughly five times as much as black women in market earnings between the ages of 15 and 55 - approximately $25,000 per birth for white women, versus $5,000 per birth for black women, in 1981 dollars, (2) foregone hours of market work per birth are two to three times higher for white women than for black women - approximately 1,500 to 3,000 hours per birth for white women, compared with 600 to 1,000 hours per birth for black women; (3) opportunity expenditures for white women and more educated black women have been declining over time; (4) opportunity expenditures on children are roughly proportional to the number of births, for women of similar background and labour market experience; and (5) it is the labour supply reductions immediately following each birth that contribute most to observed opportunity expenditures, whereas the marginal effect of total family size is small by comparison.
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Document Type: Research Article

Affiliations: The Urban Institute, 2100 M Street, N.W. Washington, D.C. 20037

Publication date: March 1, 1988

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