The Labor Market Returns to Delaying Pregnancy

We study the extent to which delaying pregnancy mitigates the impact of children on women’s careers. We leverage quasi-random variation in the timing of pregnancy in a setting where women intend to delay having children by using long-acting reversible contraceptives. While most women successfully delay pregnancy, some have unplanned pregnancies. Analyzing linked health and labor market data from Sweden, we find that unplanned pregnancies halt women’s career progression resulting in income losses of 20% by five years after the unplanned pregnancy. Using pregnancy as an instrument for birth in a dynamic treatment effect framework, the detrimental effects of unplanned children are larger for younger women and women enrolled in education. This suggests that unplanned births are particularly disruptive early on when women are investing in their careers. In contrast, when we estimate the impact of children identified from quasi-random success of fertilization procedures, we find small impacts of children. Taken together, the results suggest that children can have large disruptive effects on careers, and by timing pregnancy women can mitigate these effects.