Case studies using Stata for applications in various disciplines: Labor market concentration and employee childbearing

We find that labor market concentration can be an important driver of employee childbearing. First, we present two parsimonious models to illustrate how childbearing decisions are related to employer concentration, highlighting job security and wages as relevant channels of labor market power. We then conduct empirical analyses based on comprehensive matched employer-employee panel data from Portugal from 2010 to 2023, including a novel variable on worker absences for childbearing reasons and an instrumental-variables approach. At both the extensive and intensive margins of childbearing, leave of absence is negatively impacted by concentration levels. For instance, an increase in labor concentration from the 25th to the 75th percentile can reduce childbearing by up to 94% for women up to 40 years of age. By extending the canonical child penalty model to consider labor market concentration, we also find that employees in more concentrated markets in their childbirth year are more penalized in terms of subsequent wages. Our results indicate that reducing employer concentration can increase fertility rates.