ABSTRACT
Cross-sectional studies find little association between a woman’s marital status and her wage rate, but often a negative relationship between children and wages. The negative relationship between children and wages is reduced and sometimes eliminated by inclusion in wage equations of detailed controls for “labor force attachment” such as experience and tenure. There are, however, a number of reasons to be cautious in drawing causal
inferences from these cross-sectional relationships. First, labor market experience and tenure may be endogenous if labor supply is responsive to wages. Because the estimated effect of children on wages is sensitive to the inclusion of controls for experience and tenure, it is important to explore whether experience and tenure are in fact exogenous variables in wage equations. Second, economic theories of fertility and marriage (e.g. Butz and Ward, 1979; Easterlin, 1980; Becker, 1981) suggest that marital status and number of children may also be endogenous with respect to wages. Third, estimated wage effects of marriage or children may be biased by unmeasured heterogeneity: women may be selected or may self-select into different marital or fertility states on the basis of unmeasured characteristics that are correlated with wages (e.g. “career orientation”), even if marriage or fertility are not directly responsive to wages. Finally, bias could result if, among married women or women with children, those with high wages tend to select into employment (i.e. the standard problem of sample selection bias). Previous researchers have recognized some of these potential problems in inter-
preting cross-sectional relationships between wages, marriage, and children, but have not attempted to evaluate the empirical importance of each of them in a single data set. This chapter presents evidence on themagnitudes of these biases, assesses the sensitivity of the estimated effects to alternative approaches to eliminating bias, and attempts to arrive at unbiased estimates of the effects of marriage and children on wages. The effects of marriage and motherhood on wages are of particular interest due
to their relation to male-female wage differentials. For example, Becker (1985) has hypothesized that a portion of male-female wage differentials is attributable to gender-role specialization bymarried women andmen. In particular, he has argued that the “hourly earnings of singlewomen [should] exceed those ofmarriedwomen
even when both work the same number of hours and have the same market capital because child care and other household responsibilities induce married women to seek more convenient and less energy intensive jobs” (p. S54).1 Therefore, the empirical analysis of wage differentials between single and married women, and womenwith andwithout children, can shed light on thewage effects of gender-role specialization.
