Fertility as a driver of maternal employment

Based on findings from high-income countries, typically economists hypothesize that having more children unambiguously decreases the time mothers spend in the labor market. Few studies on lower-income countries, in which low household wealth, informal child care, and informal employment opportunities prevail, find mixed results. Using Mexican census data, I do not find evidence for negative employment effects of an instrument-induced increase in fertility. Mothers increasingly work in the informal sector when their family size increases. The presence of grandmothers and low wealth appear to be important. Econometric approaches that allow extrapolating from this complier-specific effect indicate that the response in informal employment is bounded to be non-negative for the entire sample.