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Fertility and Female Employment Dynamics in Europe: The Effect of Using Alternative Econometric Modeling Assumptions

  • Michaud, Pierre-Carl

    ()

    (University of Québec at Montréal)

  • Tatsiramos, Konstantinos

    ()

    (University of Nottingham)

We investigate the direct and long-run effects of fertility on employment in Europe estimating dynamic models of labor supply under different assumptions regarding the exogeneity of fertility and modeling assumptions related to initial conditions, unobserved heterogeneity and serial correlation in the error terms. We find overall large direct and long-run effects of giving birth on employment probabilities, and these effects differ considerably across countries. We find that within countries the results are sensitive to the statistical assumption made on initial conditions, the inclusion of serial correlation and the assumption of strict exogeneity of children. However, the pattern across countries is robust to these assumptions. We show that such patterns are largely consistent with prevailing institutional differences related to the flexibility of the labor markets and family policies.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3853.

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Length: 38 pages
Date of creation: Nov 2008
Date of revision:
Handle: RePEc:iza:izadps:dp3853
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  1. Del Boca, Daniela & Sauer, Robert M., 2006. "Life Cycle Employment and Fertility Across Institutional Environments," IZA Discussion Papers 2285, Institute for the Study of Labor (IZA).
  2. Carrasco, Raquel, 2001. "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labor Participation," Journal of Business & Economic Statistics, American Statistical Association, vol. 19(4), pages 385-94, October.
  3. Dean R. Hyslop, 1999. "State Dependence, Serial Correlation and Heterogeneity in Intertemporal Labor Force Participation of Married Women," Econometrica, Econometric Society, vol. 67(6), pages 1255-1294, November.
  4. Pietro Garibaldi & Etienne Wasmer, 2004. "Raising Female Employment : Reflections and Policy Tools," Sciences Po publications info:hdl:2441/8942, Sciences Po.
  5. V. Joseph Hotz & Robert A. Miller, . "An Empirical Analysis of Life Cycle Fertility and Female Labor Supply," University of Chicago - Population Research Center 86-15, Chicago - Population Research Center.
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  9. Joshua D. Angrist & William N. Evans, 1996. "Children and Their Parents' Labor Supply: Evidence from Exogenous Variation in Family Size," NBER Working Papers 5778, National Bureau of Economic Research, Inc.
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  13. Carro, Jesus M., 2007. "Estimating dynamic panel data discrete choice models with fixed effects," Journal of Econometrics, Elsevier, vol. 140(2), pages 503-528, October.
  14. Alessie, Rob & Stefan Hochguertel & Arthur van Soest, 2002. "Ownership of Stocks and Mutual Funds: A Panel Data Analysis," Royal Economic Society Annual Conference 2002 3, Royal Economic Society.
  15. Bratti, Massimiliano & Tatsiramos, Konstantinos, 2008. "Explaining How Delayed Motherhood Affects Fertility Dynamics in Europe," IZA Discussion Papers 3907, Institute for the Study of Labor (IZA).
  16. Marco Francesconi, 2002. "A Joint Dynamic Model of Fertility and Work of Married Women," Journal of Labor Economics, University of Chicago Press, vol. 20(2), pages 336-380, Part.
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