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Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans

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  • Iva Trako

    (PSE - Paris School of Economics - ENPC - École des Ponts ParisTech - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - UP1 - Université Paris 1 Panthéon-Sorbonne - CNRS - Centre National de la Recherche Scientifique - EHESS - École des hautes études en sciences sociales - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement, PJSE - Paris Jourdan Sciences Economiques - UP1 - Université Paris 1 Panthéon-Sorbonne - ENS Paris - École normale supérieure - Paris - PSL - Université Paris sciences et lettres - EHESS - École des hautes études en sciences sociales - ENPC - École des Ponts ParisTech - CNRS - Centre National de la Recherche Scientifique - INRAE - Institut National de Recherche pour l’Agriculture, l’Alimentation et l’Environnement)

Abstract

This paper examines the effect of fertility on parental labor-force participation in a developing country in the Balkans, with particular attention to the intervening role of childcare provided by grandparents in extended families. In order to address the potential endogeneity in the fertility decision, I exploit Albanian parental preference for having sons combined with the siblings sex-composition instrument as an exogenous source of variation. Using a repeated cross-section of parents with at least two children, I find a positive and statistically significant effect of fertility on parental labor supply for those parents who are more likely to be younger, less educated or live in extended families. In particular, IV estimates for mothers show that they increase labor supply, especially in terms of hours worked per week and the likelihood of working off-farm. Similarly, father's likelihood of working off-farm and having a second occupation increase as a consequence of further childbearing. The heterogeneity analysis suggests that this positive effect might be the result of two plausible mechanisms: childcare provided by non-parental adults in extended families and greater financial costs of maintaining more children.

Suggested Citation

  • Iva Trako, 2018. "Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans," PSE Working Papers halshs-01828471, HAL.
  • Handle: RePEc:hal:psewpa:halshs-01828471
    Note: View the original document on HAL open archive server: https://halshs.archives-ouvertes.fr/halshs-01828471
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    Keywords

    fertility; parental labor-force participation; instrumental variables;
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