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Is it better for kids to have an at-home parent? Here's what data shows, according to Brown economist Emily Oster

"We simply do not see much evidence at all that that impacts the kinds of outcomes we can measure for kids."

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Economist Emily Oster on going back to work after having a kid: What to...

For Emily Oster, an economist at Brown University and mother of two, the choice to be a working parent was never that complicated. "I actually never really had much of a question about whether to return to work," she says. "It was something that I had always planned to do."

But having done extensive research around parental decision-making on the topic, she acknowledges that, for many parents, it isn't a simple or even binary decision. "For many people, there is a question about whether they will return from having a kid to their job, a question of what intensity at what time they will return," she says. "And for people who do return in particular, I think that there's often a lot of anxiety and guilt and discomfort. People find this to be a difficult decision, and it doesn't always feel natural."

One data point that may help you simplify the choice: It may not matter very much in terms of your children's future health or academic success. "What I found in my research is that in fact, this decision isn't very important for outcomes for kids," she says.

'Any effects we see in any direction are really small'

What exactly does Oster mean when she says the return-to-work decision isn't very important? "If you look at things, either the choice to work when kids are small, or the choice to work when they're older, we simply do not see much evidence at all that that impacts the kinds of outcomes we can measure for kids," she says.

"So if you said, 'Kids whose moms stay home do better on tests' — we don't see that. If you said, 'Are they healthier?' We don't see that. In general, any effects we see in any direction are really small."

That doesn't mean that the decision simply boils down to what is going to make the parent contemplating returning to work happy, either. Because the data isn't compelling on that front either. Among women with advanced degrees, for example, which Oster admits isn't a representative sample, research shows that there is extra satisfaction that comes with having a career and with having a family, but not when the two are combined.

"These are hard things to separate out," she says. "I think it's particularly challenging in the U.S. where you have short or no parental leave, but then also a culture of work that doesn't especially lend itself to simultaneously being a parent."

The upside of inconclusive data on this front is that it can help dial back the rhetoric of what is categorically best for a child or best for the parent considering this decision, Oster says. "I think it's potentially much more helpful to focus on the idea that there's probably a right choice for your family," she says. "It's much more wrapped up in things about the income stream you have, or what the other [parent] would be doing, or what you want, or whether you want to be working outside of the home or not, which is not something that gets discussed as much."

Crunch the numbers to figure out what's best for your family

If one parent is considering staying home with the kids, sit down and do some math to determine the financial ramifications of the decision, Oster says. The first step, she says, is to weigh the short-term cost of a lost income against the cost savings on child care, which tends to be more expensive the younger your child is. "There's a short-term balance between child-care expenditures and other auxiliary expenditures that come with working, commuting, and so on, and it's weighing that against the income," she says.

The other component involves thinking long-term about how leaving the workforce now could affect your prospects down the line. "If you leave the labor market now and you want to return later, you will return typically at a lower wage, or at least lower than you would have had you stayed in for that time," Oster says. "It also can affect the kind of career trajectory that people have. So there's sort of a long-term lost income."

There can also be longer-term ramifications on the Social Security benefits you receive in retirement, experts point out.

So if you said, 'Kids whose moms stay home do better on tests' — we don't see that. If you said, 'Are they healthier?' We don't see that.
Emily Oster
Economist, Brown University

Thinking about what that extra income means for your family is the final, crucial factor in your decision-making, Oster says.

"It's important to think about how much that extra money matters to you in terms of not dollars, but in happiness points — in what we call utility," she says. "Say it's an extra $30,000 a year once you take everything into account. What is that $30,000 buying you? And how much do you care about the thing that it's buying you? Is it extra savings you can use later? Is it a new car? Is it a different kind of house?"

No one has the definitive answer on this front, but by considering the real-life ramifications of these decisions, parents can be more intentional and feel less guilty, no matter what they choose, Oster says. "I think that's going to help people understand that these choices matter in terms of utility, not just in terms of dollars."

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