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

Iva Trako (1, 2)

1 PSE - Paris School of Economics
2 PSE - Paris-Jourdan Sciences Economiques

This paper examines the effect of fertility on parental labor-force participation in a developing country. In order to address the potential endogeneity in the fertility decision, I exploit Albanian parental preference for having sons as an exogenous source of variation. Using a repeated cross-section, I find that having an additional child has a positive and statistically significant effect on parental labor-force participation. 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 feeding more children.

Mots clés: fertility; parental labor-force participation; instrumental variables

Domaines: Economies et finances

Iva Trako. Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans. 2016. ⟨halshs-01361443⟩