Taxing Families: The Impact of Child-related Transfers on Maternal Labor Supply (PDF)
Revise & resubmit at AEJ: Macro
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.
Luxuries, Necessities, and the Allocation of Time (PDF)
We develop and estimate a novel framework for thinking about the allocation of time by revisiting Becker's notion that the opportunity cost of time is determined by activities other than market work. These activities are produced by combining time and goods. We document that households engage in two types of activities: luxuries and necessities. An increasing share of time and goods is allocated to luxuries as wages rise. The opposite is true for necessities. To rationalize these facts, we estimate a model with non-homothetic preferences in time use. We use the model to study the effect of wage changes and price changes on hours worked, the allocation of time and goods to activities, and welfare. Our results show that households compensate rises in activity prices or reductions in wages by shifting from luxuries to necessities. Since activities are highly substitutable and the activity production inputs time and goods can be substituted to a lesser extent, households are able to absorb some of the reduction in income by shifting to time-intensive necessities. As a result, household welfare declines less than income. We argue that these findings have novel implications for thinking about cross-sectional differences in hours worked and the relation between income and welfare inequality.
Work in Progress
Rising Cohabitation and Child Development (Poster)
Cohabitation rates of couples without children have steadily increased in the U.S. over the past 50 years. Yet, cohabitation rates of couples with small children have only increased for the less educated. What explains this differential rise in cohabitation rates by education and what are the implications for child investment and child outcomes? We show empirically that cohabiting women experience smaller childbirth penalties, work more in the labor market, and spend less time with their children as compared to married women. Subsequently, their children are less likely to obtain a college degree. To rationalize these facts, we build an overlapping generations model of marriage, cohabitation, and child development. Parents are altruistic towards their children and invest time and goods into their development. This, in turn, increases the probability that a child completes college. Couples can choose to separate in every period but married couples pay a divorce cost. Assets are split equally between spouses if couples were married prior to separation, but not if spouses previously cohabited. The model matches differences in hours worked, time, and money invested in children between married and cohabiting women. A comparison of the 1975 and 2015 steady states reveals that changes in the gender wage gap and the college premium are important drivers of the rise in cohabitation among less educated women with children over this period.
Patents and Economic Growth
The Political Economy of Laws to "Protect" Women
Fixed-Term Contracts, Fertility, and the Gender Wage Gap
joint with Hanna Wang