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Female Employment and Fertility - The Effects of Rising Female Wages

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  • Christian Siegel

Abstract

Increases 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.

Suggested Citation

  • Christian Siegel, 2012. "Female Employment and Fertility - The Effects of Rising Female Wages," CEP Discussion Papers dp1156, Centre for Economic Performance, LSE.
  • Handle: RePEc:cep:cepdps:dp1156
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    References listed on IDEAS

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    1. Female Employment and Fertility - The Effects of Rising Female Wages
      by UDADISI in UDADISI on 2012-08-01 20:07:00

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    Cited by:

    1. Christian Siegel, 2017. "Female Relative Wages, Household Specialization and Fertility," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 24, pages 152-174, March.
    2. Jørgen T. Lauridsen, 2015. "Is there a fertility paradox in Denmark?," ERSA conference papers ersa15p50, European Regional Science Association.
    3. Johanna Wallenius & Tobias Laun, 2016. "Home and Market Hours, Human Capital Accumulation and Fertility," 2016 Meeting Papers 518, Society for Economic Dynamics.
    4. Mankart, Jochen & Oikonomou, Rigas, 2016. "The rise of the added worker effect," Economics Letters, Elsevier, vol. 143(C), pages 48-51.
    5. Lauridsen, Jørgen T., 2017. "Small-Area Variation of Fertility Rates," COHERE Working Paper 2017:4, University of Southern Denmark, COHERE - Centre of Health Economics Research.
    6. Macan, Vaneza Jean & Deluna, Roperto Jr, 2013. "Relationship of Income Inequality and Labor Productivity on Fertility in the Philippines: 1985-2009," MPRA Paper 51679, University Library of Munich, Germany.
    7. Saridakis, George & Marlow, Susan & Storey, David J., 2014. "Do different factors explain male and female self-employment rates?," Journal of Business Venturing, Elsevier, vol. 29(3), pages 345-362.

    More about this item

    Keywords

    Fertility; female labor supply; household production; intrahousehold allocations;

    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; Aggregate Human Capital; Aggregate Labor Productivity
    • 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

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