Women's Employment During Pregnancy and Following Childbirth

This Note develops and tests a model of labor supply behavior near the birth of a first child. The model postulates that changes in labor supply are related to changes in a woman's reservation wage, since the market wage she is offered is assumed constant over the period. The reservation wage rises over the course of the pregnancy. After the delivery, the presence of an infant raises the value of the mother's time in the home. Thus, labor supply is hypothesized to relate to market wages as well as to factors that influence home productivity. The measures of home productivity include education, marital status, and family income other than the wife's earnings. The authors test this model on data for the 1980s, a time when major changes in labor force behavior occurred. The results support the hypothesis that women with higher wages are more likely to work both during pregnancy and after giving birth. Women with fewer sources of other family income are also more likely to work.