The growth in labor market participation among women with young children has
raised concerns about the potential negative impact of the mother’s absence from home
on child outcomes. Recent data show that mother’s time spent with children has in fact
declined in the last decade, while the indicators of children’s cognitive and noncognitive
outcomes have worsened. The objective of our research is to estimate a model of the
cognitive development process of children nested within and otherwise standard model
of household life cycle behavior. The model is able to capture a number of possible
feedbacks between the child quality and employment processes in the household, which
we believe sheds some light on the intertemporal relationships observed in the data
and the possible impacts of labor market shocks on the welfare of children.