Time to Grow Up? Adult Children as Determinants of Parental Labor Supply

Abstract

As children transition to adulthood, do they continue being a major determinant of parental labor supply? To answer this question, we examine the effects of college costs on the labor supply of mothers and fathers by exploiting the roll-out of nine generous state merit aid programs from 1993 to 2004, which made college more affordable. Mothers of college-age children decrease their annual hours of work after the introduction of these state-wide programs, while fathers do not adjust their labor supply. Mothers of college-going children are entirely responsible for the decline in hours of work, where mothers of children who do not go to college experienced no change in hours of work. The decline in labor supply is mainly due to adjustments among married, more educated, and white mothers.