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30. Mai 2018

Cluster-Seminar Öffentliche Finanzen und Lebenslagen

Fertility as a Driver of Maternal Employment


30. Mai 2018
12:30 - 13:30


Anna J. Schwartz Room
Room 5.2.010
Mohrenstraße 58
10117 Berlin


Julia Schmieder

Based on findings of an extensive empirical literature that mainly stem from high- income countries, economists often hypothesize that having more children, especially young ones, unambiguously decreases the time mothers spend in the labor market. Re- search on middle- and low-income countries is scarce, despite of several interesting aspects that are common to these countries and that potentially matter for the relationship between fertility and maternal labor supply: the low wealth of a large number of house- holds, the provision of informal child care within extended families, and the high prevalence of informal employment. I use Mexican census data from 2010 in order to provide new evidence on the relationship between fertility and female labor market outcomes in a middle-income country. In order to disentangle causal effects of childbearing, parental preferences for mixed-sex siblings are exploited. My findings show that an exogenous rise in family size is associated with a significant increase in labor supply by mothers that are induced to change their family size by the instrument. This response tends to be driven by an increase in formal employment at the intensive margin for a very small fraction of women, while having mainly an impact at the extensive margin for informal labor. I further show that the presence of grandparents and low household wealth potentially contribute to this positive effect. The external validity of my results is shown to be limited, but econometric approaches that allow to extrapolate from this effect indicate that the response in informal employment is non-negative for the whole sample.