One issue that has pervaded policy discussions for decades is the difficulty that school districts experience in retaining teachers. Almost a quarter of entering public school teachers leave teaching within the first three years and empirical evidence has related high attrition rates of beginner teachers to family circumstances, such as maternity or marriage. I examine female teachers' career choices and inquire about the effects that wage increases and child care subsidies have on their employment decisions. I set up a dynamic model of job search where individuals simultaneously make employment and fertility decisions, fit it to data from a national longitudinal survey and estimate it by Simulated Method of Moments. Estimates indicate that gains of exiting the teaching workforce to start a family vary between 75% and 88% of the average teaching wage if the exit occurs during the first five years. At late periods and provided a positive stock of children, nonpecuniary penalties to return to teach lie between one and two times the average teaching wage. A 20 percent raise in teaching wages increases retention by 14% and decreases the proportion of teachers giving birth by 50%. Results suggest that fertility changes occur not only at earlier periods but also after a career interruption when teachers are considering a returning decision. The effectiveness of the wage policy in attracting back to the field individuals who left teaching to enroll in nonteaching jobs is positively associated with the greatest impact that the policy has on fertility in nonteaching. Child care subsidies increase retention by 11% and 29% with the lowest and highest subsidy, respectively. New births are concentrated at earlier periods of teachers' careers and thus, generate longer first teaching spells. However, large nonpecuniary rewards at late periods of the non labor market alternative relative to being in teaching as well as exits out of the workforce concentrated at later periods lead the decrease of returning rates of teachers who dropped the workforce altogether.
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