Long-Run Effects of Incentivizing Work After Childbirth / Elira Kuka, Na'ama Shenhav.

Format:

Book

Author/Creator:

Kuka, Elira.

Contributor:

National Bureau of Economic Research.

Shenhav, Na'ama.

Series:

Working Paper Series (National Bureau of Economic Research) no. w27444.

NBER working paper series no. w27444

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2020.

Summary:

This paper uses a panel of SSA earnings linked to the CPS to estimate the impact of increasing post-childbirth work incentives on mothers' long-run career trajectories. We implement a novel research design that exploits variation in the timing of the 1993 reform of the Earned Income Tax Credit (EITC) around a woman's first birth and in eligibility for the credit. We find that single mothers exposed to the expansion immediately after a first birth ("early-exposed") have 3 to 4 p.p. higher employment in the 5 years after a first birth than single mothers exposed 3 to 6 years after a first birth ("late-exposed"). Ten to nineteen years after a first birth, early-exposed mothers have the same employment and hours as late-exposed mothers, but have accrued 0.5 to 0.6 more years of work experience and have 6 percent higher earnings. Incorporating long-run effects on EITC benefits and earnings increases the implied marginal value of public funds (MVPF) of the expansion. Our results suggest that there are steep returns to work incentives at childbirth that accumulate over the life-cycle.

Notes:

Print version record

June 2020.