On the estimation of the effect of labour participation on fertility
In this paper we consider the estimation of the causal effect of female labour market status (participation and employment) on fertility. We focus on the sensitivity of the estimated effect to (i) the assumptions about the exogeneity of labour market status; and (ii) the time interval between the measurement of fertility and employment status. Using Spanish quarterly data, we estimate a switching probit model that accounts for the joint determination of both variables. In order to obtain a behavioural effect of the former on the latter, we look at the timing of conception instead of the timing of birth, and present alternative sets of estimates depending on the accuracy with which conception is measured (yearly or quarterly). Our results show a positive although non-significant effect of participation and employment on the probability of having the first child, once the sample of women who conceive in the same quarter (or one quarter later) in which labour market status is measured and the endogeneity between both variables is accounted for. We find that annual data tend to over-estimate the negative effect of employment or participation on the probability of having a child, but the main biases appear when looking at the effect of participation.
KeywordsLabour market status Fertility Binary choice Endogeneity
JEL ClassificationJ11 J13 J21 J22
Unable to display preview. Download preview PDF.
- Angrist JD, Evans WN (1998) Children and their parents labor supply: evidence from exogenous variation in family size. Am Econ Rev 88: 450–477Google Scholar
- Becker G (1960) An economic analysis of fertility. Demographic and economic change in developed countries. Universities-National Bureau of Economic Research Conference. Series 11 (NBER, Princeton, NJ)Google Scholar
- Browning M (1992) Children and household economic behaviour. J Econ Lit 30: 1434–1475Google Scholar
- Fleisher BM, Rhodes GF (1979) Fertility, women’s wage rates, and labour supply. Am Econ Rev 69: 14–24Google Scholar
- Guiterrez-Domenech M (2007) The impact of labour market on the timing on marriage and births in Spain. J Popul Econ, forthcomingGoogle Scholar
- Hotz VJ, Klerman JA, Willis RJ (1997) The economics of fertility in developed countries. In: Rosenzweig MR, Stark O (eds) Chapter 7 in Handbook of Population and Family EconomicsGoogle Scholar
- Kalwij AS (1999) Household consumption, female employment and fertility decisions: a microeconometric analysis. Ph.D. dissertation, Tilburg UniversityGoogle Scholar
- Mincer J (1963) Market prices, opportunity cost and income effects. In: Christ C et al. (eds) Measurements in Economics: Studies in Mathematical Economics in honour of Yehuda Grunfeld, Standford UniversityGoogle Scholar
- Wolfe B (1980) Chidbearing and/or labour force participacion: the education connection. Res Popul Econ 2: 365–385Google Scholar