Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans

Iva Trako
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Iva Trako: PSE - Paris School of Economics - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS-PSL - École normale supérieure - Paris - PSL - Université Paris Sciences et Lettres - INRA - Institut National de la Recherche Agronomique - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique

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Abstract: 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. In order to address the potential endogeneity in the fertility decision, I exploit 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, I find a positive and statistically significant effect of fertility on parental labor supply for those parents who are more likely to be younger, less educated or live in extended families. In particular, IV estimates for mothers show that they increase labor supply, especially in terms of hours worked per week and the likelihood of working off-farm. Similarly, father's 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.

Keywords: fertility; parental labor-force participation; instrumental variables (search for similar items in EconPapers)
Date: 2018-07
New Economics Papers: this item is included in nep-dem, nep-dev and nep-lab
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