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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.