Taxing Families: The Impact of Child-related Transfers on Maternal Labor Supply (PDF)
Conditionally accepted at American Economic Journal: Macroeconomics
The employment rate of married women with and without pre-school children varies substantially across countries. To what extent can child-related transfers account for this variation? I develop a life-cycle model in which married couples jointly decide their labor supply, female human capital evolves endogenously, and some couples have access to grandparental childcare. I show that child-related transfers can explain most of the variation in the employment rates of married women, even after taking the labor income tax treatment and cross-country variation in childcare fees into account.
Journal of the European Economic Association, Vol. 20(6), 2271-2316, December 2022.
Two centuries ago, in most countries around the world, women were unable to vote, had no say over their own children or property, and could not obtain a divorce. Women have gradually gained rights in many areas of life, and this legal expansion has been closely intertwined with economic development. We aim to understand the drivers behind these reforms. To this end, we distinguish between four types of women’s rights - economic, political, labor, and body - and document their evolution over the past 50 years across countries. We summarize the political-economy mechanisms that link economic development to changes in women's rights and show empirically that these mechanisms account for a large share of the variation in women's rights across nations and over time.
Non-technical summary: Vox.eu
In: Handbook of Family Economics Vol. 1, Editors: Shelly Lundberg and Alessandra Voena, (Amsterdam: Elsevier)
In this survey, we argue that the economic analysis of fertility has entered a new era. First-generation models of fertility choice were designed to account for two empirical regularities that, in the past, held both across countries and across families in a given country: a negative relationship between income and fertility, and another negative relationship between women’s labor force participation and fertility. The economics of fertility has entered a new era because these stylized facts no longer universally hold. In high-income countries, the income-fertility relationship has flattened and in some cases reversed, and the cross-country relationship between women’s labor force participation and fertility is now positive. We summarize these new facts and describe new models that are designed to address them. The common theme of these new theories is that they view factors that determine the compatibility of women’s career and family goals as key drivers of fertility. We highlight four factors that facilitate combining a career with a family: family policy, cooperative fathers, favorable social norms, and flexible labor markets. We also review other recent developments in the literature, and we point out promising new directions for future research on the economics of fertility.
Luxuries, Necessities, and the Allocation of Time (PDF)
Households enjoy utility from activities that require a combination of time and goods. We classify activities into two types: luxuries and necessities. Luxuries (necessities) are activities for which time and expenditure shares rise (decline) with income. We develop and estimate a model with nonhomothetic preferences and find that time and goods are substitutable in producing activities. Activities are also substitutable among themselves. Hence, wage and price changes cause large reallocations of time and expenditures across activities. This effect is quantitatively important for welfare inequality. Since 2003, the rise in the price of leisure luxuries has reduced welfare inequality while the rise in wage dispersion has increased it.
Bundling Time and Goods: Implications for the Dispersion in Hours Worked (PDF)
We document that the dispersion in hours worked is large in the cross-section. We study the quantitative effect of wage dispersion on hours dispersion using a model in which households combine their time and market goods to produce consumption activities. We estimate several models with different numbers of activities on the paired expenditures and time use data by consumption activity. The estimated model can account for 25%-87% of the dispersion in hours worked over 2003-2018 with the model incorporating more activities generating more dispersion. The substitutability between goods and time within an activity and across activities is key to the result.
Cohabitation and Child Development (PDF)
In the U.S., college-educated couples cohabit less and marry at higher rates than other couples only if they have children. What explains the higher marriage rates of these couples and what are the implications for child development? We show empirically that married women experience larger childbirth penalties, work less in the labor market, and spend more time with their children compared to cohabiting women. Subsequently, their children are more likely to obtain a college degree. To rationalize these facts, we build an overlapping generations model of marriage, cohabitation, wealth, and child development. Parents are altruistic towards their children and invest both time and money into their development. This, in turn, increases the probability that a child completes college. Married couples in the model face lower separation probabilities, yet higher utility costs upon divorce and divide assets equally when they split. In this environment, college-educated couples with children marry at higher rates for two reasons. First, marriage provides insurance against the higher human capital depreciation that college-educated women face when they invest time in children. Second, time and money investments are dynamic complements. This implies that the return from investing time is particularly high for couples that can match time investments early in life with high money investments at later stages in the child’s development.
Work in Progress
Why Are Boys Falling Behind? A Historical Perspective on Gender Gaps in School Achievement
Patents and Economic Growth