Many social scientists hypothesize that the time mothers spend with their children is crucial for children’s cognitive development. Unlike most studies that investigate maternal employment effects on children, we estimate direct casual effects of time-diary measured maternal time using the CDS – PSID dataset. Considering maternal time allocation endogenous, the effect of an increase of maternal time associated with a rise in childcare prime (IV estimate) is an order of magnitude larger than OLS estimates for Applied Problems and Word-Letter identification tests. Evidence also shows that the effect is larger for children living college educated mothers and in two-parent household.
JEL codes: D1, J13, C36.
Keywords: casual effect, Children outcomes, instrumental variables., maternal time-investment