Mother's time allocation, child care and child cognitive development

This paper analyzes the effects of maternal employment and non-parental child care on child cognitive development, taking into account the mother's time allocation between leisure and child-care time. I estimate a behavioral model, in which maternal labor supply, non-parental child care and time allocation decisions are considered to be endogenous choices of the mother, and the child cognitive development depends on maternal and non-parental child care. The results show that the mother's child-care time is more productive than non-parental child care, at any age of the child. This implies that a reduction in a mother's child-care time, induced by a higher labor supply, may not be compensated for by the increase in non-parental child care use, and, hence, may lead to a negative effect on the child's cognitive ability. The estimation of a counterfactual model where a mother can only allocate her time between child care and work shows that neglecting the mother's time allocation choice between child care and leisure overestimates the productivity of a mother's time with the child.