Understanding the Mechanism of the Return to Delayed First Birth

Jane L. Herr, Harvard University

In this paper I decompose the effect of the timing of a woman’s first birth on her long-run wage level to establish the mechanism by which fertility timing affects wages. Focusing on women who have their first child after they start working, I assess the key mechanisms by which timing affects wages by considering its intermediate effect on economic behaviors central to wage growth. I find that the most important economic channels speak to the influence of first-birth timing on the pattern of human capital accumulation: total labor supply and its timing, and the number of labor force exits, especially the probability of exiting the pre-birth job at motherhood. In contrast, little of the effect arises from the influence of first birth timing on women’s job and occupational progression over time.