LAUSR

When children have health problems, mothers face a tradeoff between the decision to work to satisfy increased expenses and the decision to stay home to fulfill enlarged caregiving needs, especially for children with chronic conditions. This research used an instrumental variables approach to investigate the labor market consequences of mothers due to burden to care children with health problems. We found mothers’ employment probability increased by 0.9% for every $100 of increased out-of-pocket medical spending, while employment probability fell by 1.0% for every half day of school/day care a sick child missed. By correcting for endogeneity we addressed a potential empirical bias. Analyses by subgroups showed that Hispanic mothers were less likely to work in the labor market with high caregiving burden. We also found that the effects of time burden on labor market outcomes were magnified for black mothers.