Long-Run Effects of Incentivizing Work after Childbirth

Abstract

This paper identifies the impact of increasing post-childbirth work incentives on mothers’ long-run careers. We exploit variation in work incentives across mothers based on the timing of a first birth and eligibility for the 1993 expansion of the Earned Income Tax Credit. Ten to nineteen years after a first birth, single mothers who were exposed to the expansion immediately after birth (“early”), rather than 3–6 years later (“late”), have 0.62 more years of work experience and 4.2 percent higher earnings conditional on working. We show that higher earnings are primarily explained by improved wages due to greater work experience. (JEL H24, H31, J16, J22, J31)

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