Fertility and Parental Labor-Force Participation
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World Bank, Washington, DC
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This paper examines the effect of
fertility on parental labor force participation in a
developing country in the Balkans, with particular attention
to the intervening role of childcare provided by
grandparents in extended families. To address the potential
endogeneity in the fertility decision, the analysis exploits
the Albanian parental preference for having sons combined
with the siblings' sex-composition instrument as an
exogenous source of variation. Using a repeated
cross-section of parents with at least two children, the
analysis finds a positive and statistically significant
effect of fertility on parental labor supply for parents who
are more likely to be younger, less educated, or live in
extended families. The IV estimates for mothers show that
they increase labor supply, especially hours worked per week
and the likelihood of working off-farm. Similarly,
fathers' likelihood of working off-farm and having a
second occupation increase as a consequence of further
childbearing. The heterogeneity analysis suggests that this
positive effect might be the result of two plausible
mechanisms: childcare provided by non-parental adults in
extended families and greater financial costs of maintaining
more children.
Palabras clave
LABOR FORCE PARTICIPATION, LABOR SUPPLY, FERTILITY, INSTRUMENTAL VARIABLES, CHILDCARE, EDUCATIONAL ATTAINMENT, OFF-FARM EMPLOYMENT