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A Note on the Changing Relationship Between Fertility and Female Employment Rates in Developed Countries

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  • Namkee Ahn
  • Pedro Mira

Abstract

In this paper we look at a panel of OECD aggregate fertility and labor market data between 1970 and 1995 and we report some striking recent developments. Total Fertility Rates (TFR) were falling and Female Participation Rates were increasing, conforming to a well known long-run trend. Along the cross-sectional dimension, the correlation between TFR and FPR was negative and significant during the 1970's and up to the early 1980's. This seemed consistent with secular comovements. However, by the late 1980's the correlation had become positive and equally significant. We discuss our findings within the framework of standard neoclassical models of fertility and labor supply adapted to macro data, as in Butz and Ward (1979). In order to explain the reversal of the correlation between fertility and participation rates, we consider simple extensions of their framework. First, we discuss the possibility that income effects of female wage increases are important. Next, we turn to three other factors: inflexible working hours faced by individual workers, the possibility of purchasing child care, and unemployment.

Suggested Citation

  • Namkee Ahn & Pedro Mira, 1999. "A Note on the Changing Relationship Between Fertility and Female Employment Rates in Developed Countries," Working Papers wp1999_9903, CEMFI.
    • Handle: RePEc:cmf:wpaper:wp1999_9903
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    1. Gary S. Becker & H. Gregg Lewis, 1974. "Interaction between Quantity and Quality of Children," NBER Chapters, in: Economics of the Family: Marriage, Children, and Human Capital, pages 81-90, National Bureau of Economic Research, Inc.
    2. Butz, William P & Ward, Michael P, 1979. "The Emergence of Countercyclical U.S. Fertility," American Economic Review, American Economic Association, vol. 69(3), pages 318-328, June.
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    4. McDonald, John, 1983. "The emergence of countercyclical US fertility: A reassessment of the evidence," Journal of Macroeconomics, Elsevier, vol. 5(4), pages 421-436.
    5. Willis, Robert J, 1973. "A New Approach to the Economic Theory of Fertility Behavior," Journal of Political Economy, University of Chicago Press, vol. 81(2), pages 14-64, Part II, .
    6. Gary S. Becker, 1960. "An Economic Analysis of Fertility," NBER Chapters, in: Demographic and Economic Change in Developed Countries, pages 209-240, National Bureau of Economic Research, Inc.
    7. David M. Blau, 1992. "The Child Care Labor Market," Journal of Human Resources, University of Wisconsin Press, vol. 27(1), pages 9-39.
    8. Diane J. Macunovich, 1995. "The Butz-Ward Fertility Model in the Light of More Recent Data," Journal of Human Resources, University of Wisconsin Press, vol. 30(2), pages 229-255.
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    Cited by:

    1. Larry E. Jones & Michele Tertilt, 2006. "An Economic History of Fertility in the U.S.: 1826-1960," NBER Working Papers 12796, National Bureau of Economic Research, Inc.
    2. Ronald Rindfuss & David Guilkey & S. Morgan & Øystein Kravdal & Karen Guzzo, 2007. "Child care availability and first-birth timing in Norway," Demography, Springer;Population Association of America (PAA), vol. 44(2), pages 345-372, May.
    3. Cathal O'Donoghue & David Meredith & Eamon O'Shea, 2011. "Postponing maternity in Ireland," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(1), pages 59-84.
    4. Massimiliano Bratti, 2003. "Labour force participation and marital fertility of Italian women: The role of education," Journal of Population Economics, Springer;European Society for Population Economics, vol. 16(3), pages 525-554, August.
    5. Nicola Hülskamp, 2006. "Fertility and the Influence of Women s Industries," LIS Working papers 434, LIS Cross-National Data Center in Luxembourg.
    6. Karsten Hank & Michaela R. Kreyenfeld, 2001. "Childcare and fertility in (western) Germany," MPIDR Working Papers WP-2001-019, Max Planck Institute for Demographic Research, Rostock, Germany.
    7. Juan Carlos Conesa, 1999. "Vintage specific learning-by-doing," Working Papers in Economics 47, Universitat de Barcelona. Espai de Recerca en Economia.
    8. Juan Carlos Conesa, 2002. "Educational attainment and timing of fertility decisions," Working Papers in Economics 78, Universitat de Barcelona. Espai de Recerca en Economia.

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