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

Abstract

Abstract As children transition to adulthood, do they remain a major determinant of parental labor supply? To answer this question, we examine how college costs affect the labor supply of mothers and fathers by exploiting the roll-out of nine generous state merit aid programs in the United States from 1993 to 2004, which made college more affordable. Mothers of college-age children decreased their annual hours of work after the introduction of these state-wide programs, while fathers did not adjust their labor supply. Mothers of college-going children were entirely responsible for the decline in hours of work, where mothers of children who did not go to college experienced no change in hours of work. The decline in labor supply was mainly due to adjustments among high-income, married, more educated, and white mothers, whose labor supply was more elastic to college costs.