Working and caring for large families: do mothers face a trade-off?

Does having three or more children lower the chance that mothers participate in the labour force compared to those who have two children? Most of the previous literature on this topic describes the substantial indirect costs of children for first-time mothers, but having additional children at higher parities can entail even higher indirect costs. This paper finds a labour force participation gap between mothers who have three or more children and those who have two children. It explores whether this gap is caused by the selectivity of those who purposely choose to have large families or by family size itself. It also questions if the gap occurs simply because mothers with 3 or more children are consequently more likely to care for young children: 42 % of them have a child under the age of five compared to only 38.7 % of mothers with 2 children. A priori, it is unclear if the employment gap between these two groups of mothers is driven by the difference in the age of the youngest child or by the difference in the number of children. This paper contributes to the literature by disentangling the effect of having an additional child from having an additional young child in the household with a simple but innovative approach (grouping by mother's age and her age at the second pregnancy) that avoids controlling for the age of the youngest child in regression. [ABSTRACT FROM AUTHOR]