Is There Really a Child Penalty in the Long Run?
21JenniferRM
5Viliam
14DanielFilan
8Brendan Long
10tailcalled
2JBlack
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Something that has always seemed a bit weird to me is that it seems like economists normally assume (or seem to assume from a distance) that laborers "live to make money (at work)" rather than that they "work to have enough money (to live)".
Microeconomically, especially for parents I think this is not true.
You'd naively expect, for most things, that if the price goes down, the supply goes down.
But for the labor of someone with a family, if the price given for their labor goes down in isolation, then they work MORE (hunt for overtime, get a second job, whatever) because they need to make enough to hit their earning goals in order to pay for the thing they need to protect: their family. (Things that really cause them to work more: a kid needs braces. Thing that causes them to work less: a financial windfall.)
Looking at that line, the thing it looks like to me is "the opportunity cost is REAL" but then also, later, the amount of money that had to be earned went up too (because of "another mouth to feed and clothe and provide status goods for and so on"). Maybe?
The mechanistic hypothesis here (that parents work to be able to hit spending targets which must rise as family size goes up) implies a bunch of additional details: (1) the husband's earnings should be tracked as well and the thing that will most cleanly go up is the sum of their earnings, (2) if a couple randomly has and keeps twins then the sum of the earnings should go up more.
Something I don't know how to handle is that (here I reach back into fuzzy memories and might be trivially wrong from trivially misremembering) prior to ~1980 having kids caused marriages to be more stable (maybe "staying together for the kids"?), and afterwards it caused marriages to be more likely to end in divorce (maybe "more kids, more financial stress, more divorce"?) and if either of those effects apply (or both, depending on the stress reactions and family values of the couple?) then it would entangle with the data on their combined earnings?
Scanning the paper for whether or how they tracked this lead me to this bit (emphasis not in original), which gave me a small groan and then a cynical chuckle and various secondary thoughts...
As opposed to the fall in female earnings, however, we see no dip in male earnings. Instead, both groups of men continue to closely track each other’s earnings in the years following the first IVF treatment as if nothing has happened. Towards the end of the study period, the male earnings for both groups fall, which we attribute to the rising share of retired men.
(NOTE: this ~falsifies the prediction I made a mere 3 paragraphs ago, but I'm leaving that in, rather than editing it out to hide my small local surprise.)
If I'm looking for a hypothetical framing that isn't "uncomplimentary towards fathers" then maybe that could be spun as the idea that men are simply ALWAYS "doing their utmost at their careers" (like economists might predict, with a normal labor supply curve) and they don't have any of that mama bear energy where they have "goals they will satisfice if easy or kill themselves or others to achieve if hard" the way women might when the objective goal is the wellbeing of their kids?
Second order thoughts: I wonder if economists and anthropologists could collaborate here, to get a theory of "family economics" modulo varying cultural expectations?
I've heard of lots of anthropological stuff about how men and women in Africa believe that farming certain crops is "for men" or "for women" and then they execute these cultural expectations without any apparent microeconomic sensitivity (although the net upshot is sort of a reasonable portfolio that insures families against droughts).
Also, I've heard that on a "calorie in, calorie out" basis in hunter-gatherer cultures, it is the grandmothers who are the huge breadwinners (catch lots of rabbits with traps, and generally forage super efficiently) whereas the men hunt big game (which they and the grandmas know is actually inefficient, if an anthropologist asks this awkward question) so that, when the men (rarely) succeed in a hunt they can throw a big BBQ for the whole band and maybe get some nookie in the party's aftermath.
It seems like it would be an interesting thing to read a paper about: "how and where the weirdly adaptive foraging and family economic cultures" even COME FROM.
My working model is that it is mostly just "monkey see, monkey do" on local role models, with re-calibration cycle times of roughly 0.5-2 generations. I remember writing a comment about mimetic economic learning in the past... and the search engine says it was for Unconscious Economics :-)
2You'd naively expect, for most things, that if the price goes down, the supply goes down.
I think they mention in Economics 101 that there are two major exceptions to this: labor and land.
It's usually said the other way round (if the price goes up, the supply goes up), and then it's obvious that the supply of land is more or less constant, and the supply of labor of poor people is "as much as they can" and if you pay them too much they become rich and now they can choose to work less and have more free time.
We can’t just compare women with children to those without them because having children is a choice that’s correlated with all of the outcomes we care about. So sorting out two groups of women based on observed fertility will also sort them based on income and education and marital status etc.
Successfully implanting embryos on the first try in IVF is probably not very correlated with these outcomes.
This is maybe a dumb question, but I would have imagined that successful implantation would be related to good health outcomes (based on some intiution that successful implantation represents an organ of your body functioning properly, and imagining that the higher success rates of younger people has to do with their health). Is that not true?
This is what I came to ask about. Randomizing based on health and then finding that the healthier group makes more despite other factors seems like it doesn't really prove the thing the paper is claiming.
Although the fact that wages matched between the groups beforehand is pretty interesting.
Second, Lomborg’s 2024 paper finds evidence that women time their births to just before a wage growth plateau. The evidence it gives again comes from IVF failures. Women who were planning to have a birth, but never succeed, have much flatter wage growth after their planned birth year, even though they didn’t actually have any kids. So the divergence between childrearing mothers and non-childbearing mothers shows up even in this placebo case when neither group actually had kids. Therefore, the event study is overstating the earnings impact of childbirth.
Couldn't it also be that the women in question plan their career based on the expectation to have children and this is what leads to the plateau? In that case it seems like it would be incorrect to interpret these results as evidence against a child penalty, as it's merely that the child penalty affects women regardless of whether they have the children. To check, I think you should ask the study participants why their career plateaued then.
Yes, that was my first guess as well. Increased income from employment is most strongly associated with major changes, such as promotion to a new position with changed (and usually increased) responsibilities, or leaving one job and starting work somewhere else that pays more.
It seems plausible that these are not the sorts of changes that women are likely to seek out at the same rate when planning to devote a lot of time in the very near future to being a first-time parent. Some may, but all? Seems unlikely. Men seem more likely to continue to pursue such opportunities at a similar rate due to gender differences in child-rearing roles.
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