Background: Previous research has shown that children who do not live with both of their parents fare worse on a variety of outcomes. However, less is known about the heterogeneity of children’s socioeconomic context and the factors that contribute to the negative effect of family structure.

Objective: This study examines whether, under which circumstances, and through which mechanisms maternal employment influences the socioemotional well-being of children living with a lone mother in Scotland.

Methods: The study uses longitudinal data from Growing Up in Scotland to follow a sub-sample of children living with lone mothers (N = 918). It applies Inverse Probability Weighting to estimate the effect of maternal employment when the child is aged 3 on children’s socioemotional well-being at age 5, net of selection effects; and the KHB decomposition method to assess the mediating role of household income and maternal well-being.

Results: Children of working lone mothers are less at risk of having severe socioemotional problems, particularly if their mothers work in medium–high occupational positions. Higher levels of household income and the greater psychological well-being of working mothers partly explain the positive effect of maternal employment.

Contribution: This study enhances understanding of the factors associated with the socioemotional well-being of children living with a lone mother by providing a detailed analysis of the role of maternal employment.