Female Employment and Fertility - The Effects of Rising Female Wages
AbstractIncreases in female employment and falling fertility rates have often been linked to rising female wages. However, over the last 30 years the US total fertility rate has been fairly stable while female wages have continued to grow. Over the same period, we observe that women's hours spent on housework have declined, but men's have increased. I propose a model with a shrinking gender wage gap that can capture these trends. While rising relative wages tend to increase women's labor supply and, due to higher opportunity cost, lower fertility, they also lead to a partial reallocation of home production from women to men, and a higher use of labor-saving inputs into home production. I find that both these trends are important in understanding why fertility did not decline to even lower levels. As the gender wage gap declines, a father's time at home becomes more important for raising children. When the disutilities from working in the market and at home are imperfect substitutes, fertility can stabilize, after an initial decline, in times of increasing female market labor. That parents can acquire more market inputs into child care is what I find important in matching the timing of fertility. In a mode l extension, I show that the results are robust to intrahousehold bargaining.
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Bibliographic InfoPaper provided by Centre for Economic Performance, LSE in its series CEP Discussion Papers with number dp1156.
Date of creation: Jul 2012
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Fertility; female labor supply; household production; intrahousehold allocations;
Find related papers by 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
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
This paper has been announced in the following NEP Reports:
- NEP-ALL-2012-07-29 (All new papers)
- NEP-DEM-2012-07-29 (Demographic Economics)
- NEP-LAB-2012-07-29 (Labour Economics)
- NEP-LMA-2012-07-29 (Labor Markets - Supply, Demand, & Wages)
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Blog mentionsAs found by EconAcademics.org, the blog aggregator for Economics research:
- Female Employment and Fertility - The Effects of Rising Female Wages
by UDADISI in UDADISI on 2012-08-01 15:07:00
- Pierre-Richard Agénor & Baris Alpaslan, 2013. "Child Labor, Intra-Household Bargaining and Economic Growth," Centre for Growth and Business Cycle Research Discussion Paper Series 181, Economics, The Univeristy of Manchester.
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