ABSTRACT
Childbirth forces women to cease employment temporarily. The length of this career interruption varies considerably across women because of differences in their jobs, their financial status, and the cost and desirability of day care for their children, Many studies claim that the career interruptions associated with child-bearing are responsible for many of the gender-related differences in labor-market outcomes. It has been argued, for example, that women's greater frequency of career interruptions causes them to prefer certain occupations and may induce hiring discrimination against women by some employers. In the past few decades, women with young children have become much more likely to work and have also returned to work more quickly after childbirth. These changes have contributed to a reduction in the gender difference in earnings and a decline in occupational segregation. The effect of children on the employment decision can be described in the context of a simple theoretical model. Define a woman's reservation wage as the lowest hourly wage at which she would accept employment. If her offered wage rate exceeds her reservation wage, she chooses employment. The value of the reservation wage will be determined partly by the demand for her time in the home.
