Children’s Emotional and Behavioral Problems and Their Mothers’ Labor Supply

It has been documented that about 20% of children and adolescents suffer from a diagnosable mental or addictive disorder in the United States. The high prevalence of children's emotional and behavioral problems (EBP) might have a negative effect on their mothers' labor market outcomes because children with EBP require additional time for treatment. However, these children may require additional financial resources, which might promote mothers' labor supply. Previous studies have only considered chronic conditions in analyzing the impact of children's health on parental work activities. Moreover, most of these studies have not accounted for endogeneity in children's health. This article estimates the effects of children's EBP on their mothers' labor supply by family structure while accounting for endogeneity in children's health. We used the 1997 and 2002 Child Development Supplements (CDS) to the Panel Study of Income Dynamics (PSID). We used probit and bivariate probit models to estimate mothers' probability of employment, and tobit and instrumental variable tobit models to estimate the effects of children's EBP on their mothers' work hours. Findings show negative effects of children's EBP on their married mothers' employment and on their single mothers' work hours.