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This paper argues that seeking a simple, universal effect of maternal employment on the welfare of very young children is not a fruitful strategy. Instead, it suggests that: (1) maternal employment affects children through a variety of mechanisms, some positive and others negative; and (2) the consequences of maternal employment depend on the family's socioeconomic circumstances and the social context. Using data on pre-school aged children in the U.S. from the Children of the NLSY, the paper examines the impact of maternal employment on children's verbal abilities in different family economic contexts. The results indicate that while maternal absence and alternate child care arrangements have some negative impact on children's verbal ability (particularly for boys), in low-income families this negative impact is compensated to a large extent by the positive impact of maternal income and the improved quality of children's home environment which that income can buy.

This paper moves beyond the typical correlates of individual mothers' decisions to participate in market work and to use non-maternal child care by examining how child care availability in the community relates to families' arrangements for employment and child care in communities of varying income level and population density. We measure center child care availability in all U.S. ZIP codes using several business-level data sources (Economic Census, ZIP code Business Patterns) and a Special Tabulation of the 1990 Decennial Census, the latter of which also provides an estimate of family day care availability. Descriptive analyses suggest that center care is more available when both a sufficient population base and a source of income (private of subsidies) are present, as in low and high income urban areas. In contrast, family day care is most available in middle income, non-metropolitan areas. Using data for 3- to 6-year olds in the geocoded Children of the NLSY data set, we (1) jointly predict whether a woman works in the market and whether she places her child in another's care and (2) simultaneously predict the number of hours employed mothers' work and the hours their children spend in relative care, center-based care, and family day care. Findings suggest that available care may be necessary for some mothers to enter the market work or to select a type of child care, especially in the non-metropolitan areas of the U.S.