The Impact of Children on Women's Labour Supply and Earnings in the United Kingdom: Evidence Using Twin Births

The objective of this article is to investigate the effect of children on women’s labour supply and earnings for the UK. Estimating the causal relationship between family size and economic status is complicated because the same factors that increase family size may also affect the labour market outcomes of women. The birth of twins is used as an instrument to address this problem. Amongst women with children under age 13, the IV estimates indicate that a larger family induced by a twin birth adversely affects women’s labour supply and earnings. Amongst women with older children, the IV results show no evidence of a causal effect, despite significant OLS relationships. Finally, we compare these results to estimates produced using a twins’ sex composition instrument. Estimates using this instrument are very close to the estimates using twin births and imply that the labour market consequences of childbearing disappear over time.