Dynamic Modeling of Fertility and Labour Market Participation of Married or Cohabiting Women
AbstractWe jointly model fertility and participation decisions of women who livein couple using a dynamic model. In this paper we analyze the labour supplyand the fertility decisions of married or cohabiting women in France, Spain,Germany, UK and Denmark. We estimate, for the period going from 1994 to2001, a dynamic bivariate probit model with random effects using the ECHP(European Community Household Panel) and using a simulated maximumlikelihood estimator. These estimates are made on an annual basis takinginto account the initial conditions problem. The decisions of participationand fertility of women who live in couple depend on the individual characteristics(observed or unobserved) and are characterized by a significant statedependence. Our results suggest that the decisions of employment and fertilitycannot be modeled separately. The differences in fertility across thesecountries are explained by individual characteristics and variations in socialand fiscal policies. However, the unobserved components of heterogeneityalso play a central role in the observed differences across countries. Weshow the importance of the permanent income component in the participationdecision. Random effects are negatively correlated across the equationsof the model. Consequently, women who, a priori, prefer to have a higherconsumption have weaker preferences for fertility.
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Bibliographic InfoPaper provided by Centre de Recherche en Economie et Statistique in its series Working Papers with number 2010-09.
Date of creation: 2010
Date of revision:
Other versions of this item:
- Cyriaque EDON & Thierry KAMIONKA, 2010. "Dynamic modeling of fertility and labour market participation of married or cohabiting women," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2010017, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
- J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
- J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply
- C33 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Models with Panel Data; Longitudinal Data; Spatial Time Series
- C35 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Discrete Regression and Qualitative Choice Models; Discrete Regressors; Proportions
- J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-03-19 (All new papers)
- NEP-EUR-2011-03-19 (Microeconomic European Issues)
- NEP-LAB-2011-03-19 (Labour Economics)
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