Explaining the Returns to Delayed Childbearing for Working Women

Working women who have a first birth at a later age have higher wages on average than early child bearers. When this fact is combined with declining fecundity by age, women face a difficult tradeoff when choosing the timing of their first birth. This paper seeks to understand the sources of the delay premium by studying differences in observed characteristics and behaviors among women with different ages at first birth. Using data from the National Longitudinal Survey of Youth from 1979 to 2004, I observe a wage premium of 3% per year of delay. This premium is observed both in cross section data from 2004 and in panel data, and is larger for high skilled women. Additionally, I find that for high skilled women, the wage penalty to having any children (the family gap) increases with time since the birth, but this increase is more modest for women who delay. Next, I show a strong positive correlation between age at first birth and characteristics such as education, actual experience, age at first marriage, and the probability of being in a professional or managerial career. Using residual analysis in a random effects framework, approximately 90% of the delay premium is explained by differences in observable characteristics, where education and experience have the most explanatory power. * Preliminary and incomplete. Please do not cite without permission. † E-mail: [email protected], website: http://www.nd.edu/~kbuckles