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Labor Market Frictions and Lowest Low Fertility

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  • Virginia Sanchez Marcos

    (Universidad de Cantabria)

  • Ezgi Kaya

    (Cardiff Business School)

  • Nezih Guner

    (CEMFI)

Abstract

How does the dual labor market structure, i.e. the presence of jobs with temporary and permanent contracts, affect the fertility behavior of women in Spain? Using data from the Spanish Social Security Records, we first show that having a temporary contract has a significant and negative effect on the probability that a woman has her first birth. A highly-educated women with permanent contract is twice more likely to have a birth compared to a similar woman with a temporary contract. Second., we show that having a child lowers the probability of being promoted from a temporary to permanent contract and the effect is strongest for highly-educated women. We next build a life-cycle model in which married women decide whether to work or not as well as how many children to have and when to have them. In the model economy, all agents start their labor careers with temporary jobs and children affect the probability of being promoted to a permanent jobs negatively. Given the cost of having children, both in terms of time and money as well as in terms of labor market implications, women make their fertility choices. We use this model to quantify how the dual labor market structure affects fertility decisions as well as potential effects of labor market reforms on fertility.

Suggested Citation

  • Virginia Sanchez Marcos & Ezgi Kaya & Nezih Guner, 2017. "Labor Market Frictions and Lowest Low Fertility," 2017 Meeting Papers 1015, Society for Economic Dynamics.
  • Handle: RePEc:red:sed017:1015
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    References listed on IDEAS

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    1. Labor Market Frictions and Lowest Low Fertility
      by Christian Zimmermann in NEP-DGE blog on 2019-12-07 04:18:07

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    Cited by:

    1. David de la Croix & Aude Pommeret, 2017. "Childbearing Postponement, its Option Value, and the Biological Clock," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2017016, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    2. Andrew E. Clark & Anthony Lepinteur, 2020. "A Natural Experiment on Job Insecurity and Fertility in France," PSE Working Papers halshs-02540036, HAL.

    More about this item

    JEL classification:

    • 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
    • J21 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Force and Employment, Size, and Structure
    • J22 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Time Allocation and Labor Supply

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