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The effects of children on mothers' employment and earnings : evidence from Spain

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  • Alfonso Alba

    ()

  • Julio Cáceres-Delpiano

    ()

Abstract

Using a large and rich data set from administrative sources, we study the effects of children on mothers’ employment and earnings in Spain. By being able to pinpoint the event of multiple births along a twenty-year panel of women’s work history, we address two methodological hurdles in this research: the omitted-variable problem and concerns about twins as a good instrument for family size. We find that the effects of fertility on mothers’ labor outcomes differ by level of education. Women with only compulsory education experience falls of 17 percent in employment and 15 percent in earnings, increased duration of non-employed spells, and reductions in the likelihood of holding a secondary job or chaining contracts within a certain employment spell. Among more educated women, the employment rate drops by a mere 4 percent and earnings increase slightly in some cases. Nonetheless, a relatively higher employment rate of more educated mothers, besides unexpected changes in family size, involves costs in terms of working conditions, like holding temporary contracts. Our results indicate that mothers in general have a hard time regaining employment as revealed by the sharp increase in the take-up rate of unemployment insurance benefits around the third month after the birth. Finally, we are able to obtain some results for the impact of family size on the labor supply of a second earner (husband) in the household. For instance, we find that second earners tend to compensate for mothers’ income diminution.

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Bibliographic Info

Paper provided by Universidad Carlos III, Departamento de Economía in its series Economics Working Papers with number we1313.

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Date of creation: Jul 2013
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Handle: RePEc:cte:werepe:we1313

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  1. Jaisri Gangadharan & Joshua Rosenbloom & Joyce Jacobson & James Wishart Pearre III, 1996. "The Effects of Child-Bearing on Married Women's Labor Supply and Earnings: Using Twin Births as a Natural Experiment," NBER Working Papers 5647, National Bureau of Economic Research, Inc.
  2. Martha J Bailey, 2006. "More Power to the Pill: The Impact of Contraceptive Freedom on Women's Life Cycle Labor Supply," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 121(1), pages 289-320, 02.
  3. Blau, Francine D & Grossberg, Adam J, 1992. "Maternal Labor Supply and Children's Cognitive Development," The Review of Economics and Statistics, MIT Press, vol. 74(3), pages 474-81, August.
  4. V. Joseph Hotz & Seth G. Sanders & Susan Williams McElroy, 1999. "Teenage Childbearing and Its Life Cycle Consequences: Exploiting a Natural Experiment," NBER Working Papers 7397, National Bureau of Economic Research, Inc.
  5. David E. Bloom & David Canning & Guenther Fink & Jocelyn E. Finlay, 2007. "Fertility, Female Labor Force Participation, and the Demographic Dividend," PGDA Working Papers, Program on the Global Demography of Aging 2507, Program on the Global Demography of Aging.
  6. Angrist, Joshua D & Evans, William N, 1998. "Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size," American Economic Review, American Economic Association, American Economic Association, vol. 88(3), pages 450-77, June.
  7. Julian P. Cristia, 2008. "The Effect of a First Child on Female Labor Supply: Evidence from Women Seeking Fertility Services," Journal of Human Resources, University of Wisconsin Press, vol. 43(3), pages 487-510.
  8. Browning, Martin, 1992. "Children and Household Economic Behavior," Journal of Economic Literature, American Economic Association, vol. 30(3), pages 1434-75, September.
  9. Pedro Mira & Namkee Ahn, 2001. "Job bust, baby bust?: Evidence from Spain," Journal of Population Economics, Springer, Springer, vol. 14(3), pages 505-521.
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