A Pooled Time-Series Analysis on the Relation Between Fertility and Female Employment
Various authors find that in OECD countries the cross-country correlation between the total fertility rate and the female labour force participation rate turned from a negative value before the 1980s to a positive value thereafter. Based on pooled time series analysis the literature seems to agree that this change is due to unmeasured country and time heterogeneity with respect to female employment. However, the role of female employment for time and country heterogeneity remains unclear. Using data of 22 OECD countries from 1960-2000 we estimate pooled time series models of fertility and female labour force participation by applying random effects and fixed effects panel models as well as Prais-Winsten regressions with panel-corrected standard errors and autoregressive errors. Proceeding with Prais-Winsten regressions our empirical findings reveal substantial differences across countries and time periods in the effects of female employment on fertility. Initial increases in female employment strongly lowers fertility, but continued increases have a progressively less negative effect. The country heterogeneity in the effect of female employment can also be confirmed for different regions as well as for varying welfare and gender regimes.
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