*Names in bold indicate Presenter
Given the correlation between mother work decisions and child outcomes, our second question is does this correlation perpetuate a child’s place in the earnings distribution relative to his or her parents? Children of working moms may have a higher intergenerational earnings correlation and be more likely to stay in the same earnings decile as their parents, leading to the conclusion that maternal employment is correlated with relatively less mobility. In this case, the mother working transmits advantage for children from high-earning families but does not overcome disadvantage for children from low-earning families. On the other hand, if maternal employment is correlated with higher mobility, then it may be the case that maternal employment is positive for children from families that are less well-off.
We overcome data limitations of past studies by using the Survey of Income and Program Participation matched to SSA/IRS W-2 histories of parents and their children. These data provide the employment status and earnings of each family member at any year between 1978 and 2011 and enable us to use panel data and instrumental variable techniques to come closer to a causal impact of the mother's work decisions on later child outcomes. In addition to the earnings history, we make use of historical employer characteristics from administrative business data to differentiate between the types of jobs held by mothers and investigate whether these are correlated with child outcomes. Using our various controls for the endogeneity of the mother’s work decision, we find few significant differences between the adult earnings of children with stay-at-home mothers and those with working mothers. We do however see a significant positive correlation between mothers working during preschool years and daughters’ labor force participation between ages 22 and 33. The remainder of the paper will focus on intergenerational earnings correlations and we expect that the correlation between labor force participation will impact the correlation between mother and daughter earnings for working mothers.