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Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size

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  • Joshua D. Angrist
  • William N. Evans

Abstract

Although theoretical models of labor supply and the family are well developed, there are few credible estimates of key empirical relationships in the work-family nexus. This study uses a new instrumental variable, the sex composition of the first two births in families with at least two children, to estimate the effect of additional children on parents' labor supply. Instrumental variables estimates using the sex mix are substantial but smaller than the corresponding ordinary least squares (OLS) estimates. Moreover, unlike the OLS estimates, the female labor supply effects estimated using sex-mix instruments appear to be absent among more educated women and women with high-wage husbands. We also find that married women who have a third child reduce their labor supply by as much as women in the full sample, while there is no relationship between wives' child-bearing and husbands' labor supply. Finally results to estimates produced using twins to generate instruments. Estimates using twins instruments are very close to the estimates generated by sex-mix instruments, once the estimators are corrected for differences in the ages of children whose birth was caused by the instruments. The estimates imply that the labor supply consequences of child-bearing disappear by the time the child is about 13 years old.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 5778.

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Date of creation: Sep 1996
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Publication status: published as American Economic Review (June 1998).
Handle: RePEc:nbr:nberwo:5778

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  18. Claudia Goldin, 1995. "Career and Family: College Women Look to the Past," NBER Working Papers 5188, National Bureau of Economic Research, Inc.
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  22. Ben-Porath, Yoram & Welch, Finis, 1976. "Do Sex Preferences Really Matter?," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 90(2), pages 285-307, May.
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  24. Iacovou, Maria, 2001. "Fertility and female labour supply," ISER Working Paper Series 2001-19, Institute for Social and Economic Research.
  25. J.D. Angrist & Guido W. Imbens & D.B. Rubin, 1993. "Identification of Causal Effects Using Instrumental Variables," NBER Technical Working Papers 0136, National Bureau of Economic Research, Inc.
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