The
negative correlation between marriage and childrearing and women’s hourly
pay is well documented. However, the causal nature of that relationship is
not clearly understood. The explanations for the association can be
broadly divided into three categories: household specialization (including
job interruptions, part‐time work, and lower productivity),
unobserved characteristics, and employer discrimination. To partial out
the bias from unobserved heterogeneity, data from the 1999-2007 Panel Study
of Family Dynamics (PSFD) are investigated using Allison’s Hybrid Model.
After taking unobserved heterogeneity and human capital into account, the
empirical results indicate that the effect of marriage is not significant
anymore. The cost of child rearing on hourly wage remains.