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Emma Tominey argues that mothers’ preschool labor supply decreases time investments but increases income, positively affecting mid-childhood and teenage

Image courtesy of interviewee. January 31, 2024

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This video video discusses a study investigating the effects of maternal working hours on children's outcomes in Norway. The research focuses on first-time mothers with preschool-age children and examines how increased working hours affect their children as they grow into mid-childhood and teenage years.

The study posits two primary channels:
1. **Time Investment Channel**: As mothers work more hours, they spend less time with their children, potentially leading to negative outcomes. In Norway, children often enter high-quality formal childcare during this time.
2. **Income Channel**: Increased maternal income may provide benefits through improved resources for the child, such as access to better food, educational materials, and neighborhoods with better schools.

The research utilizes extensive population-level data, analyzing variations in maternal hours and income while testing the influence of these factors on child development. The study finds that while there is a negative coefficient associated with the time investment channel, it is not statistically significant, indicating that the time spent with children in Norway is as productive as care provided elsewhere. In contrast, the income channel has a strong positive effect, suggesting that increased maternal earnings can offset any negative impacts from reduced time investment.

Additionally, subgroup analyses indicate that while the time investment effect is stronger in higher-educated households, the income effect consistently compensates across different household types, regardless of education level or gender of the child. The findings suggest that government policies promoting subsidized and high-quality childcare can enable mothers to work more without harming child outcomes.

The study emphasizes the importance of not only subsidizing childcare but ensuring its quality, offering insights for policymakers aiming to support working mothers and benefit children’s development.

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X-TIMESTAMP-MAP:LOCAL=00:00:00.000,MPEGTS=900000

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So what we're interested in understanding is what's the

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effect of mothers working hours on their children?

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So we're in the context in Norway.

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Um, mothers have just had their first child

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and their first child's at preschool age,

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so they haven't started school yet.

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And we're really interested in understanding

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if mothers decide to work extra hours,

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what's the effect on their children when their children are

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at school in mid childhood?

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Does it even have an effect on their children in,

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in teenage years later in life?

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Um, so this is interesting question

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because when mothers are increasing their hours,

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there are two important things that change in the household.

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So on the one hand, the mother's spending less time

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with their child, they're at work,

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and their child's gonna spend more time with somebody else.

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So this is the counterfactual childcare in Norway that tends

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to be, they're gonna spend more,

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this children are gonna spend more time in a

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formal childcare setting.

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Um, and so this is gonna be a,

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we are gonna call this a time investment channel.

01:02.835 --> 01:05.185
We're really interested in understanding if there's a

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negative or positive effect from mothers from

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the time investment channel.

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Um, but the second thing that changes is

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that mothers are working that earning money

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and they're bringing money into their household.

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And potentially that money can be spent in a way

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that benefits children as well.

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So they can maybe buy books, they can buy better food,

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they can even if they earn enough money

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by a household in a neighborhood with better schools.

01:31.045 --> 01:33.705
So this is our income channel, and what we try

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and do in a paper is not just estimate the total effect

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of mother's working hours,

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but to understand these two spec different channels

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of the time investment channel and the income channel.

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And the question we ask is, can income compensate any

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negative time investment channel?

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Our paper comes in, with a background of other papers,

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initially more descriptive papers trying

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to understand the correlation

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between mom's working hours and children.

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And then more recently, the causal,

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causal inference literature has grown.

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So for example, we've got paper by BLO and Grossberg, ER

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and Francesconi, and these are based in the US

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and the UK respectively.

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And they ask, what's the effect of mothers working hours

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and tend to find a negative effect.

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Um, so the innovation in our paper is that,

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well, there are two things really.

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Firstly, we're in a different context.

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We're in a context in Norway

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where the government invests in high quality

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early school childcare.

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So when the mothers,

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is predominantly mothers are deciding,

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should I increase my hours?

02:42.605 --> 02:44.015
They know that their children are gonna go

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to a high quality nursery.

02:45.875 --> 02:48.975
Um, and that's different to the UK and the us.

02:49.275 --> 02:52.255
So it is really important to understand, you know,

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o other results from the previous

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literature which find this negative

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effect on mother's working hours. Are they context

02:59.245 --> 03:00.245
Specific?

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Um, and then the second innovation in our paper is,

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like I say, we really wanna dig a little bit deeper

03:04.875 --> 03:06.655
to understand the how

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and not just why, sorry,

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not just whether mother's labor supply,

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improve child outcomes, but, but how.

03:13.875 --> 03:16.895
So that's digging deep into these two different mechanisms

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of the time investment and the income channels.

03:19.865 --> 03:21.735
We're in the context of Norway, like I said.

03:21.995 --> 03:24.095
Um, and we're very lucky in the Norwegian context

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that we can observe the population level data

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called big data.

03:29.635 --> 03:31.975
So our families in the dataset

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and our sample, they are the whole population of Norway

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who have a child between 1997 and 2001.

03:39.325 --> 03:41.455
Okay? So we can observe all of these households,

03:41.955 --> 03:43.695
but what if you think about what we need

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to do in our methodology is

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to create exogenous variation in the mother's

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hours, working hours.

03:51.475 --> 03:53.735
Um, but also for the income channel, we need

03:53.735 --> 03:54.935
to have a methodology

03:55.005 --> 03:58.295
that can create exogenous variation in the household income

03:58.795 --> 04:01.615
so that we can decompose these two channels in a cordal

04:01.775 --> 04:03.055
causal mediation analysis.

04:04.015 --> 04:07.875
So the way that we do that is we have an extension

04:07.935 --> 04:09.755
to a literature called the partially

04:09.755 --> 04:10.955
overlapping peer literature.

04:11.055 --> 04:13.875
So let me explain this. The idea is that

04:13.975 --> 04:16.395
for every household in Norway, we're very lucky that

04:16.395 --> 04:18.395
what we can do is we can observe all

04:18.395 --> 04:19.435
of their family members.

04:20.055 --> 04:23.275
So we take the, for every household we can see the sisters

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and the sisters-in-law who have already had a child

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and who've already made their labor supply decisions.

04:29.215 --> 04:33.075
We can also observe every single workmate for these,

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for everybody in the population.

04:35.575 --> 04:38.235
Um, and so we, what we do is we take a set

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of workmates belonging to each household who have, again,

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already had a child

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and have already made their decisions about labor supply.

04:45.895 --> 04:49.075
And from the partially overlapping peer group literature,

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what we know is that we can create an instrumental variable,

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for example, for hours by taking the hours decisions

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made by their workmates.

04:58.095 --> 05:00.995
For our family members for income,

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we can construct an instrumental variable,

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which is the income of their family's workmates.

05:06.575 --> 05:08.915
So you can see that we are using what's called peers

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or peers as instrumental variable for the decisions

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of these households.

05:14.025 --> 05:17.285
Um, so when doing so, we have a lot of checks in our paper,

05:17.785 --> 05:21.845
and a a lot of analysis to test the validity

05:21.845 --> 05:23.205
of these instrumental variables.

05:23.625 --> 05:25.005
So we make sure that we control

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for androgynous peer group membership, for example.

05:28.305 --> 05:31.685
Um, and we're left with the situation where we believe

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that our instrumental variables create exogenous variation

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in income and hours in a way that's not directly correlated

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with the child outcomes, except through income and hours.

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So then we can estimate the effect of

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both mother's hours in the preschool years and children

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and income in the preschool years of children.

05:52.225 --> 05:55.285
But we combine this into a causal mediation analysis,

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which allows us to

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Decompose, the effect

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of mom's working hours into the time and the income checks.

06:02.435 --> 06:04.765
What we find is that hours

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and income in the preschool years do have an effect on child

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Tesco outcomes when they're 11 and when they're 15.

06:12.065 --> 06:14.605
So specifically in the whole, in a total sample,

06:14.745 --> 06:17.925
we estimate, we do estimate a negative coefficient on ours,

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conditional on income, which tells us

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that there's a negative time investment channel.

06:23.505 --> 06:25.765
But in this context of Norway, it was never,

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it wasn't statistically significant.

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So we can say there's a a zero effect.

06:30.245 --> 06:32.445
So mom's time with a child is as productive

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as in this counterfactual care,

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but there's a really strong effect coming through income.

06:38.065 --> 06:41.045
Um, so as mothers are, sorry,

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there's a positive effect on income and child outcomes.

06:44.025 --> 06:46.565
And so when we did the causal mediation analysis,

06:46.595 --> 06:48.405
what we find is that when mothers are working,

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they're increasing their hours.

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There's essentially no effect

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through the time investment channel,

06:53.345 --> 06:54.885
but a very strong positive effect

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through the income channel.

06:56.425 --> 07:00.645
So ultimately, yes, income can compensate for any

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negative effect for the time investment channels.

07:04.725 --> 07:07.665
Um, so to understand what's going on a little bit more,

07:07.665 --> 07:09.745
we wanna speak to the child development literature.

07:10.895 --> 07:13.955
Um, and I think we can say a little bit more by

07:14.625 --> 07:16.675
looking at our subgroup analysis.

07:17.375 --> 07:21.195
So we divided the samples into high educated households,

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low educated households.

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We look separately for girls, for boys.

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And in all of these cases, it's always true

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that income compensates.

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So we never, never ever found a negative effect

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of mom's working hours as a total effect

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because income always compensated.

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But the time investment and the income channels are

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different across different household types,

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and we can learn from that.

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So for example, if you think about high educated households,

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this is where the mother's got a degree.

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Um, and we found

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that the negative time investment channel is most strong in

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these households, which is intuitive

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because it tells us that when a mother's spending time

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with a child, she can pass on some of her skills

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to the children in a way

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that improves their outcome later in life.

08:06.305 --> 08:07.885
So we've got this strong,

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relatively strong negative time investment channel,

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but these mothers earn more money,

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they're bringing more money into the household.

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So their income channel was particularly strong in a way

08:17.725 --> 08:19.925
which meant, again, income did compensate.

08:20.985 --> 08:24.975
Um, and our other analysis that we did to understand,

08:24.975 --> 08:28.135
you know, why, what's going on, why is income so important,

08:28.275 --> 08:30.495
why is it able to compensate

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for any ne negative time investment channels?

08:33.035 --> 08:36.295
And to do that, we looked at as best we could, we tried

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to understand,

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how did these households spend their money?

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And what we found is that there's a positive effect

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of mothers, income that's earned in the preschool years

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on their house value as a children at age six, just

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as those preschool years end.

08:52.355 --> 08:54.855
So it's suggesting that these families are

08:54.855 --> 08:58.525
Able to buy more expensive households,

08:58.555 --> 09:01.205
more expensive houses, and we also find

09:01.205 --> 09:04.885
that there's a positive effect on the quality of the school

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that the children are going to, which tells us

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that they're buying a more expensive house in

09:09.685 --> 09:10.885
an area with better schools.

09:10.905 --> 09:13.405
So this is potentially one of the channels through which,

09:13.745 --> 09:15.885
income can benefit children.

09:17.075 --> 09:19.365
Yeah. So I think we can learn a lot,

09:19.365 --> 09:22.125
from this paper in a way that can influence policy.

09:22.665 --> 09:25.565
So remember, we've got this backdrop of papers in the UK

09:25.565 --> 09:27.965
and the US that find a negative effect of mother's hours.

09:28.025 --> 09:29.125
And we find the opposite.

09:29.225 --> 09:31.445
We find there's no other negative effect

09:31.545 --> 09:33.525
of moms deciding to work more hours.

09:34.145 --> 09:36.125
In fact, often there's a positive effect.

09:36.725 --> 09:37.885
I say that's super important

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because the change in labor supply we see in developed

09:40.725 --> 09:43.165
countries is for mothers to be increasing their hours,

09:43.165 --> 09:45.245
they're moving towards full-time contracts.

09:45.585 --> 09:47.765
And we can see that that can be done in a way

09:47.765 --> 09:49.365
that doesn't harm your children.

09:49.985 --> 09:52.485
But what's really important is that we're in Norway,

09:52.975 --> 09:55.885
we're in a context where when a mother decides to go

09:55.885 --> 09:58.565
to work, she knows that her child can go

09:58.565 --> 10:01.565
to a childcare setting, which is high quality.

10:01.785 --> 10:03.525
So they're highly subsidized in Norway,

10:03.585 --> 10:05.405
but they're highly standardized as well.

10:05.705 --> 10:08.685
So if these mothers are low income, if they're high income,

10:09.115 --> 10:10.725
they know that their children are gonna go

10:10.725 --> 10:12.205
to a good childcare setting.

10:12.625 --> 10:15.325
So what we can learn for governments across the world

10:16.105 --> 10:18.645
is it's important to subsidize childcare.

10:18.865 --> 10:20.525
And we see that happening more and more,

10:20.865 --> 10:24.125
but the quality of the childcare is equally as important.

10:24.705 --> 10:26.765
So we really recommend that,

10:26.765 --> 10:28.685
when governments are thinking about these kind

10:28.685 --> 10:32.765
of childcare policies, they can subsidize,

10:33.025 --> 10:35.045
but standardize the level

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of care within these childcare settings.

10:36.965 --> 10:38.205
So it's high quality.

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And in that setting, we can encourage mothers to work

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and to be productive in a way

10:42.885 --> 10:44.205
that can even benefit children.

00:00 - So what we're interested in understanding is what's the effect of mothers working hours on their children? So we're in the context in Norway. mothers have just had their first child and their first child's at preschool age, so they haven't started school yet.

00:16 - And we're really interested in understanding if mothers decide to work extra hours, what's the effect on their children when their children are at school in mid childhood? Does it even have an effect on their children in, in teenage years later in life? so this is interesting question because when mothers are increasing their hours, there are two important things that change in the household. So on the one hand, the mother's spending less time

00:43 - with their child, they're at work, and their child's gonna spend more time with somebody else. So this is the counterfactual childcare in Norway that tends to be, they're gonna spend more, this children are gonna spend more time in a formal childcare setting. and so this is gonna be a, we are gonna call this a time investment channel. We're really interested in understanding if there's a negative or positive effect from mothers from

01:08 - the time investment channel. but the second thing that changes is that mothers are working that earning money and they're bringing money into their household. And potentially that money can be spent in a way that benefits children as well. So they can maybe buy books, they can buy better food, they can even if they earn enough money by a household in a neighborhood with better schools. So this is our income channel, and what we try

01:33 - and do in a paper is not just estimate the total effect of mother's working hours, but to understand these two spec different channels of the time investment channel and the income channel. And the question we ask is, can income compensate any negative time investment channel? Our paper comes in, with a background of other papers, initially more descriptive papers trying to understand the correlation between mom's working hours and children.

02:02 - And then more recently, the causal, causal inference literature has grown. So for example, we've got paper by BLO and Grossberg, and Francesconi, and these are based in the US and the UK respectively. And they ask, what's the effect of mothers working hours and tend to find a negative effect. so the innovation in our paper is that, well, there are two things really. Firstly, we're in a different context.

02:29 - We're in a context in Norway where the government invests in high quality early school childcare. So when the mothers, is predominantly mothers are deciding, should I increase my hours? They know that their children are gonna go to a high quality nursery. and that's different to the UK and the us. So it is really important to understand, you know,

02:52 - o other results from the previous literature which find this negative effect on mother's working hours. Are they context Specific? and then the second innovation in our paper is, like I say, we really wanna dig a little bit deeper to understand the how and not just why, sorry, not just whether mother's labor supply, improve child outcomes, but, but how.

03:13 - So that's digging deep into these two different mechanisms of the time investment and the income channels. We're in the context of Norway, like I said. and we're very lucky in the Norwegian context that we can observe the population level data called big data. So our families in the dataset and our sample, they are the whole population of Norway who have a child between 1997 and 2001. Okay? So we can observe all of these households,

03:41 - but what if you think about what we need to do in our methodology is to create exogenous variation in the mother's hours, working hours. but also for the income channel, we need to have a methodology that can create exogenous variation in the household income so that we can decompose these two channels in a cordal causal mediation analysis. So the way that we do that is we have an extension

04:07 - to a literature called the partially overlapping peer literature. So let me explain this. The idea is that for every household in Norway, we're very lucky that what we can do is we can observe all of their family members. So we take the, for every household we can see the sisters and the sisters-in-law who have already had a child and who've already made their labor supply decisions. We can also observe every single workmate for these,

04:33 - for everybody in the population. and so we, what we do is we take a set of workmates belonging to each household who have, again, already had a child and have already made their decisions about labor supply. And from the partially overlapping peer group literature, what we know is that we can create an instrumental variable, for example, for hours by taking the hours decisions made by their workmates. For our family members for income,

05:00 - we can construct an instrumental variable, which is the income of their family's workmates. So you can see that we are using what's called peers or peers as instrumental variable for the decisions of these households. so when doing so, we have a lot of checks in our paper, and a a lot of analysis to test the validity of these instrumental variables. So we make sure that we control for androgynous peer group membership, for example.

05:28 - and we're left with the situation where we believe that our instrumental variables create exogenous variation in income and hours in a way that's not directly correlated with the child outcomes, except through income and hours. So then we can estimate the effect of both mother's hours in the preschool years and children and income in the preschool years of children. But we combine this into a causal mediation analysis, which allows us to Decompose, the effect

05:59 - of mom's working hours into the time and the income checks. What we find is that hours and income in the preschool years do have an effect on child Tesco outcomes when they're 11 and when they're 15. So specifically in the whole, in a total sample, we estimate, we do estimate a negative coefficient on ours, conditional on income, which tells us that there's a negative time investment channel. But in this context of Norway, it was never, it wasn't statistically significant.

06:27 - So we can say there's a a zero effect. So mom's time with a child is as productive as in this counterfactual care, but there's a really strong effect coming through income. so as mothers are, sorry, there's a positive effect on income and child outcomes. And so when we did the causal mediation analysis, what we find is that when mothers are working, they're increasing their hours. There's essentially no effect

06:51 - through the time investment channel, but a very strong positive effect through the income channel. So ultimately, yes, income can compensate for any negative effect for the time investment channels. so to understand what's going on a little bit more, we wanna speak to the child development literature. and I think we can say a little bit more by looking at our subgroup analysis. So we divided the samples into high educated households,

07:21 - low educated households. We look separately for girls, for boys. And in all of these cases, it's always true that income compensates. So we never, never ever found a negative effect of mom's working hours as a total effect because income always compensated. But the time investment and the income channels are different across different household types, and we can learn from that.

07:43 - So for example, if you think about high educated households, this is where the mother's got a degree. and we found that the negative time investment channel is most strong in these households, which is intuitive because it tells us that when a mother's spending time with a child, she can pass on some of her skills to the children in a way that improves their outcome later in life. So we've got this strong,

08:07 - relatively strong negative time investment channel, but these mothers earn more money, they're bringing more money into the household. So their income channel was particularly strong in a way which meant, again, income did compensate. and our other analysis that we did to understand, you know, why, what's going on, why is income so important, why is it able to compensate for any ne negative time investment channels? And to do that, we looked at as best we could, we tried

08:36 - to understand, how did these households spend their money? And what we found is that there's a positive effect of mothers, income that's earned in the preschool years on their house value as a children at age six, just as those preschool years end. So it's suggesting that these families are Able to buy more expensive households, more expensive houses, and we also find that there's a positive effect on the quality of the school

09:04 - that the children are going to, which tells us that they're buying a more expensive house in an area with better schools. So this is potentially one of the channels through which, income can benefit children. Yeah. So I think we can learn a lot, from this paper in a way that can influence policy. So remember, we've got this backdrop of papers in the UK and the US that find a negative effect of mother's hours. And we find the opposite.

09:29 - We find there's no other negative effect of moms deciding to work more hours. In fact, often there's a positive effect. I say that's super important because the change in labor supply we see in developed countries is for mothers to be increasing their hours, they're moving towards full-time contracts. And we can see that that can be done in a way that doesn't harm your children. But what's really important is that we're in Norway,

09:52 - we're in a context where when a mother decides to go to work, she knows that her child can go to a childcare setting, which is high quality. So they're highly subsidized in Norway, but they're highly standardized as well. So if these mothers are low income, if they're high income, they know that their children are gonna go to a good childcare setting. So what we can learn for governments across the world is it's important to subsidize childcare.

10:18 - And we see that happening more and more, but the quality of the childcare is equally as important. So we really recommend that, when governments are thinking about these kind of childcare policies, they can subsidize, but standardize the level of care within these childcare settings. So it's high quality. And in that setting, we can encourage mothers to work and to be productive in a way

10:42 - that can even benefit children.

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