Jacob Bastian, Lance Lochner, 23 January 2021

As more and more mothers have entered the labour force over the last few decades, it is important to ask what effects this increased participation has had on children. This column discusses how evidence from the Earned Income Tax Credit shows that although working mothers spend less time with their children, this time reduction is not very investment-oriented. This is consistent with evidence showing positive long-run effects of the tax credit on children, suggesting that greater financial resources appear to dominate decreases in time with parents.

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