Beyond Time and Money: Parental Occupation and Early Childhood Development

This paper examines how parental occupation shapes early cognitive and noncognitive child development. Using the Millennium Cohort Study and the British Household Panel Survey, I document that parents allocate time in home production and market work differently across occupations. Estimating a system of simultaneous equations through three-stage least squares, I find that parental occupation is an important determinant of child skill formation beyond time and money: Maternal employment is associated with higher cognitive and noncognitive skills, while paternal self-employment is associated with higher noncognitive skills. Returns to parental time are higher among college-educated parents, consistent with skill-biased parenting.