Measuring the Effect of the Timing of First Birth

Abstract

The existing literature on the effect of the timing of first birth on women’s wages generally concludes that there is a benefit to fertility delay, but one that is overstated by the raw correlation. In this paper I reconsider this question, but begin by diverging from the literature to redefine “timing ” in terms of a woman’s entry into the labor force, rather than her age. When one considers the mechanisms by which fertility timing may affect a woman’s wage path, it is clear that each turns on her experience level at first birth, not her age. This transformation also reveals the important distinction between women who have their first child after they enter the labor market versus before. Applying this measure to women from the 1979 cohort of the National Longitudinal Survey of Youth, I show the following. First, when measured correctly, there is little bias captured in the correlation between first-birth timing and wages. Second, the existing literature’s focus on age has produced confused inference that has obscured the magnitude, and for some the sign, of the link between fertility timing and wages. In particular, estimates based on age at first birth understate the return to delay for women who remain childless at labor market entry. But more importantly, these positive estimates obscure the negative return to delay- to having a first birth after labor market entry, rather than before- for the majority of all but college graduates.

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