Marriage, Motherhood, and Wages

We explore several problems in drawing causal inferences from cross-sectional relationships between marriage, motherhood, and wages. We find that heterogeneity leads to biased estimates of the "direct" effects of marriage and motherhood on wages (i.e., effects net of experience and tenure); first-difference estimates reveal no direct effect of marriage or motherhood on women's wages. We also find statistical evidence that experience and tenure nay be endogenous variables in wage equations; IV estimates suggest that both OLS cross-sectional and first-difference estimates understate the direct (negative) effect of children on wages.