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Grandmothers' Labor Supply

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Abstract

The labor supply effects of becoming a grandmother are not well established in the empirical literature. We estimate the effect of becoming a grandmother on the labor supply decision of older workers. Under the assumption that grandmothers cannot predict the exact date of conception of their grandchild, we identify the effect of the first grandchild on employment (extensive margin). Our Timing-of-Events approach shows that having a first grandchild increases the probability of leaving prematurely the labor market. This effect is stronger when informal childcare is more valuable to the mother. To estimate the effect of an additional grandchild (intensive margin), we assume that the incidence of a twin birth among the third generation is not correlated with unobserved determinants of the grandmother’s labor supply (first generation). Our respective instrumental variable estimations show a significant effect of further grandchildren. Our results highlight the important influence of the extended family on the decisions of older workers and point to mediating effects of different institutional settings.

Suggested Citation

  • Wolfgang Frimmel & Martin Halla & Bernhard Schmidpeter & Rudolf Winter-Ebmer, 2017. "Grandmothers' Labor Supply," Economics working papers 2017-20, Department of Economics, Johannes Kepler University Linz, Austria.
  • Handle: RePEc:jku:econwp:2017_20
    Note: English
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    Cited by:

    1. Gema Zamarro, 2020. "Family labor participation and child care decisions: the role of grannies," SERIEs: Journal of the Spanish Economic Association, Springer;Spanish Economic Association, vol. 11(3), pages 287-312, September.
    2. Sarah Jiyoon Kwon, 2024. "Grandparents and parental labor supply during the COVID-19 pandemic," Review of Economics of the Household, Springer, vol. 22(3), pages 935-964, September.
    3. Leimer, Birgit & van Ewijk, Reyn, 2022. "Are grandchildren good for you? Well-being and health effects of becoming a grandparent," Social Science & Medicine, Elsevier, vol. 313(C).
    4. Barschkett, Mara & Spieß, C. Katharina & Ziege, Elena, 2021. "Does Grandparenting Pay off for the Next Generations? Intergenerational Effects of Grandparental Care," IZA Discussion Papers 14795, Institute of Labor Economics (IZA).
    5. Peter Eibich & Xianhua Zai, 2024. "Are the grandparents alright? The health consequences of grandparental childcare provision," Journal of Population Economics, Springer;European Society for Population Economics, vol. 37(4), pages 1-32, December.
    6. Backhaus, Andreas & Barslund, Mikkel, 2021. "The effect of grandchildren on grandparental labor supply: Evidence from Europe," European Economic Review, Elsevier, vol. 137(C).
    7. Nguyen, Cuong Viet & Tarp, Finn, 2023. "Cash Transfers and Labor Supply: New Evidence on Impacts and Mechanisms," GLO Discussion Paper Series 1243, Global Labor Organization (GLO).
    8. Rupert, Peter & Zanella, Giulio, 2018. "Grandchildren and their grandparents' labor supply," Journal of Public Economics, Elsevier, vol. 159(C), pages 89-103.
    9. Felix Glaser & Rene Wiesinger, 2024. "Life After Loss: The Causal Effect of Parental Death on Daughters' Fertility," Economics working papers 2024-01, Department of Economics, Johannes Kepler University Linz, Austria.
    10. Barschkett, Mara & Spieß, C. Katharina & Ziege, Elena, 2021. "Intergenerational Effects of Grandparental Care on Children and Parents," VfS Annual Conference 2021 (Virtual Conference): Climate Economics 242397, Verein für Socialpolitik / German Economic Association.
    11. Kwon, Sarah Jiyoon, 2023. "Grandparents and Parental Labor Supply during COVID-19 Pandemic," OSF Preprints jxyvn, Center for Open Science.
    12. Ilciukas, Julius, 2023. "Fertility and parental retirement," Journal of Public Economics, Elsevier, vol. 226(C).
    13. Ueno, Yuko & 上野, 有子 & Usui, Emiko & 臼井, 恵美子, 2021. "The Effects of Providing Childcare on Grandmothers’ Employment and Mental Health in Japan, 日本で孫の育児が祖母の就業とメンタルヘルスに及ぼす影響," CIS Discussion paper series 691, Center for Intergenerational Studies, Institute of Economic Research, Hitotsubashi University.
    14. Francesca Zanasi & Inge Sieben & Wilfred Uunk, 2020. "Work history, economic resources, and women’s labour market withdrawal after the birth of the first grandchild," European Journal of Ageing, Springer, vol. 17(1), pages 109-118, March.

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    More about this item

    Keywords

    Grandchildren; female labor supply; timing of events; instrumental variables.;
    All these keywords.

    JEL classification:

    • J13 - Labor and Demographic Economics - - Demographic Economics - - - Fertility; Family Planning; Child Care; Children; Youth
    • J14 - Labor and Demographic Economics - - Demographic Economics - - - Economics of the Elderly; Economics of the Handicapped; Non-Labor Market Discrimination
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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