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Social Institutions and Low Birth Rates

Author

Listed:
  • Ho, Christine

    (School of Economics, Singapore Management University)

  • Wang, Yutao

    (School of Economics, Singapore Management University)

Abstract

We document three cross-sectional stylized facts on labor supply and family formation. First, female labor force participation (FLFP) and total fertility rates (TFRs) are much lower in Eastern societies compared to Western economies. Second, labor hours and the gender pay gap are much higher in the East than in the West. Third, parents invest more on schooling in Eastern societies compared to Western economies. To account for these features, we develop and estimate a rich heterogeneous-agent model with endogenous marriage, fertility, labor supply, and time and money investment in children. Estimates using data from South Korea and the United States highlight the importance of gender norms and long work hours practices in driving down FLFP while child quality mores drive down fertility in South Korea. Our results suggest that a multi-pronged policy approach or reductions in the gender pay gap may help boost both FLFP and fertility in East Asia.

Suggested Citation

  • Ho, Christine & Wang, Yutao, 2024. "Social Institutions and Low Birth Rates," Economics and Statistics Working Papers 11-2024, Singapore Management University, School of Economics.
    • Handle: RePEc:ris:smuesw:2024_011
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    File URL: https://ink.library.smu.edu.sg/soe_research/2770
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    More about this item

    Keywords

    Female labor supply; fertility; child quality; gender norms; long work hours;
    All these keywords.

    JEL classification:

    • D13 - Microeconomics - - Household Behavior - - - Household Production and Intrahouse Allocation
    • E24 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Employment; Unemployment; Wages; Intergenerational Income Distribution; Aggregate Human Capital; Aggregate Labor Productivity
    • H31 - Public Economics - - Fiscal Policies and Behavior of Economic Agents - - - Household
    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J16 - Labor and Demographic Economics - - Demographic Economics - - - Economics of Gender; Non-labor Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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