Research

Female Labor Supply And Family Choices (Download)

Abstract

This dissertation delves into the dynamic relationship between women's life choices and their economic outcomes in the United States. As recent decades have witnessed significant shifts in women's wages and fertility patterns, this research seeks to answer pivotal questions about the intricate relationship between women's fertility timing and their wages, while also considering the roles of education, marriage, and labor force participation.

To address these complex questions, a dynamic structural model is developed, following a woman's life journey from age 16 to 40. This model captures her annual decisions regarding education, marriage, employment, and birth control, all aimed at maximizing her lifetime utility within a budget constraint. Estimation is achieved through the simulated maximum likelihood approach, using data from the NLSY97, resulting in an excellent model-data fit.

The model yields insights into the wage penalties associated with early motherhood. While young mothers initially earn higher wages in both work arrangements, women who delay childbirth invest more in education and accumulate valuable work experience, ultimately surpassing their peers who became mothers at a younger age. Furthermore, policy experiments conducted within the model offer a window into the potential real-world impacts of policy changes. It reveals that a policy designed to make education more accessible to mothers by reducing childcare costs is most effective in mitigating the wage penalties associated with early motherhood.

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