Fertility and housing

Young households in Hong Kong face particularly steep increases in house prices and low fertility despite low gender wage gaps. The model of fertility and housing in this paper explains why fertility decline need not reverse as female wages rise relative to male wages where housing land is scarce. For given house prices, demand for children may rise with female relative wages if housing comprises a sufficiently large share of childrearing. If the user cost of housing falls with rising house prices then fertility also rises. For endogenous house prices, however, growth in wages and a burgeoning working age population raises the market price of housing. In turn, fertility no longer rises with female relative wages. The analysis provides a novel mechanism whereby high population support ratios depress fertility and the results fit recent evidence that house prices affect fertility.     

Fertility and female wages: A new link via house prices

The analysis in this paper explains a new link between fertility and female wages that occurs through the effect of house prices. It is well known that higher female wages have an ambiguous effect on fertility: the positive income effect is offset by a negative substitution effect due to the higher opportunity cost of the maternal time required for child-rearing. Here it is shown that housing costs add a new dimension to this relationship. If the housing needs of children are a sufficiently important cost of child-rearing, then other costs of child rearing such as the opportunity cost of maternal time are rendered relatively less important. Hence the negative substitution effect of higher female wages on fertility is weaker, implying that higher female wages are more likely to boost fertility. This effect is stronger when the housing supply elasticity is high since house prices, and hence the costs of children, are kept in check. The analysis here helps to reconcile empirical observations about fertility, female wages and house prices in a number of countries. For governments concerned about low fertility, policies to increase housing supply elasticity in order to keep house prices in check would be helpful.     

A time series model of fertility and female labour supply in the UK

Multiple time series procedures suitable for estimation and testing with nonstationary data are applied to UK data on age-specific fertility rates, age-specific female labour force participation rates, and women's and men's wages. Cointegration tests establish the existence of two long-run equilibrium relations, identified as a fertility relation and a labour supply equation, for each age group. Maximum likelihood estimates of these equations are consistent with the new home economics model of fertility, and tests of Granger-causality show evidence of extensive feedback among the variables.     

An economic analysis of fertility,market participation and marriage behaviour in recent Japan

This is the 1st attempt in modelling fertility, labor force participation and marriage rate using Japanese data. The authors use Butz and Ward's model and extend it to a simultaneous equation system as in the case of Winegarden. Although the estimates obtained by Full Information Maximum Likelihood and Three Stage Least Squares of the model are statistically significant, some of the signs of the estimates are not consistent to a priori predictions. The crux of the model is that an increase in the wages of men has an unambiguous positive effect on fertility, whereas an increase in wages of women may not lead to higher fertility due to the dominance of substitution effect. But the issue of whether there are discriminatory employment practices and cultural pressures on the participation of women in the labor force, raised by the results obtained can only be answered using a larger set of data or with the help of panel data.     

When does transition increase the gender wage gap?

In the context of underlying stability in female participation rates, the gender wagegap, measured by the log of monthly wages, more than doubled in Belarus from 1996 to 2006. In this respect, the country has experienced a variant of the transition which occurred in the former Soviet Union where relative female wages fell by more than female participation. We have used the Machado and Mata (2005) analysis of the gender gap distribution. This reveals that the effect of coefficients on observed characteristics in widening the gap was increasing over time, especially in the lower and middle deciles of the wage distribution. At the same time, the effect of the characteristics themselves in reducing the gap was shrinking. The decomposition of changes in the gap over time, based on Juhn et al. (1991) , confirms that the contraction of women’s relative wages has been caused both by a deterioration in the observed characteristics of female workers and by the associated remuneration. Changes in the residual wage distribution tend to slightly reduce the gap rather than, as is the case elsewhere, to increase it. The analysis carried out in line with Neuman and Oaxaca (2004) suggests that the increased gap was not caused by sample selection. Instead, two observed factors are found to be mainly responsible for the results: hours of work have increased for men more than for women and women have experienced segregation in low‐wage industries.     

European women: why do(n’t) they work?1

To increase labour market participation is a major challenge currently faced by the EU, and attracting women into the labour force appears as a promising avenue to do so. Therefore, a clear understanding of what the factors influencing the evolution of female participation rates are in Europe is essential for a successful design of policy measures aiming at increasing participation rates. This article provides empirical evidence on the role that institutions have played in determining participation rates of women in the European labour markets. Our findings discard any doubt on the influence of institutions on women's participation in Europe. The strictness of labour market institutions negatively affects female participation rates. We also find that institutional features aimed at reconciling motherhood with professional life such as maternity leave schemes and part-time work favour participation rates of prime-age women. Additionally, fertility rates and education enrolment have been relevant for the evolution of participation rates during the sample period considered for prime-age and young females, respectively, while cohort effects drive the developments of older females.     

Wages in Managed Markets: An Explanation of the Gender Wage Gap?

Over the last decade or so in Australia, relative wages have declined in some female‐dominated occupations, notably in the care industries. This article argues that the strong growth in labour force participation of mature‐aged women has allowed wages to remain low in these ‘managed’ industries. Limited mobility across industries and occupations, at least in part due to preferences for part‐time work, and an institutional wage‐setting mechanism also play a role. Growing demand for workers in the care industries, rising skill levels of women, and slowing growth in participation as rates converge with those of men will contribute to stronger wage growth in the future.     

最低工资标准提升的就业效应——一个基于自然实验的经验研究

本文以最低工资标准提升作为自然实验,应用回归调整的差中差方法分析了最低工资标准提升对青年和中年低技能劳动力就业的影响。研究结果表明,最低工资标准提升对低技能群体中的男性和青年女性的就业没有产生显著影响;但对低技能群体中的中年女性就业却产生显著的消极影响,且最低工资标准提升幅度越大,对就业的消极影响越大。因此,政府适当的提升最低工资标准将有助于低技能劳动力整体工资水平的增长。     

Testing for uniform wage trends in West-Germany: A cohort analysis using quantile regressions for censored data

The rise of unemployment in West Germany is often attributed to an inflexibility of the wage structure in the face of a skill bias in labor demand trends. In addition, there is concern in Germany that during the 70s and 80s unions were pursuing a too egalitarian wage policy. In a cohort analysis, we estimate quantile regressions of wages taking account of the censoring in the data. We present a new framework to describe trends in the entire wage distribution across education and age groups in a parsimonious way. We explore whether wage trends are uniform across cohorts, thus defining a macroeconomic wage trend. Our findings are that wages of workers with intermediate education levels, among them especially those of young workers, deteriorated slightly relative to both high and low education levels. Wage inequality within age-education groups stayed fairly constant. Nevertheless, the German wage structure was fairly stable, especially in international comparison. The results appear consistent with a skill bias in labor demand trends, recognizing that union wages are only likely to be binding floors for low-wage earners.     

STASIS AMID CHANGE INCOME INEQUALITY IN CANADA 1965-1983

Income inequality in Canada has not changed significantly over the past two decades, though this apparent stability may be surprising in view of the major economic and social changes that occurred over this period. The share of income going to the bottom quintile remains at about four percent while the top quintile continues to receive about 40 percent of income.
Social trends such as lower fertility rates have coincided with increased female labour force participation to increase family incomes in the middle and upper-middle parts of the income spectrum. At the same time, the trend for baby boom children to establish their own separate households, and increased divorce and separation rates, have tended to create more small family units with low incomes. These social trends, in isolation of other factors, would have increased income inequality.
However, economic factors have apparently offset these tendencies. Since employment income is concentrated in the middle and upper-middle ranges, the relative fall in this source of income over the past two decades tended to be equalizing. Similarly, the fact that a large part of total investment income accrues to the elderly who have below average income implies that the trend towards high interest rates has been equalizing. Finally, the social "safety nets" put in place in the mid-1960s and early 1970s have grown in relative importance, and this too has had an equalizing impact on the distribution of income.
Given the overall stability in income inequality, the equalizing tendencies of economic factors such as high interest rates and relatively slow economic growth, with the large automatic responsiveness of governments' social safety net programs, appear to have just about exactly offset the disequalizing social factors of "baby boomers" leaving home, lower fertility, higher divorce and separation rates, and higher female labour force participation.     

Against the Wind: Labor Force Participation of Women and Economic Instability in Iran

In the last three decades, Iranian women's educational attainment has continuously increased while their fertility rate has fallen rapidly. Yet in spite of these developments, which in many countries have a positive effect on women's labor force participation, female labor force participation (FLFP) rates have remained at low levels. This paper argues that despite its overall static trend, FLFP of some Iranian women responded to economic pressures induced by macroeconomic instabilities. Looking at the Iranian economic crisis of 1994–5, the study shows that, controlling for individual fixed effects, married women in rural areas and never-married women in urban areas increased their participation rate by as much as 38 percent. No change in hours worked was found for any group of women. The differences in responses and their underlying reasons have policy implications for many developing countries.     

A cross-regional econometric investigation of fertility behaviour in Greece

An analysis of the determinants of fertility in Greece is presented. The author first summarizes the major theoretical hypotheses to be tested and the main cross-sectional econometric findings in the literature. A model of the determinants of fertility is then developed and applied to Greek data for 1961 and 1971. The model indicates that income has a positive effect on fertility and that female labor force participation and educational status have negative effects.     

On the relationship between female labour force participation and fertility in G7 countries: evidence from panel cointegration and Granger causality

This article examines the relationship between the female labour force participation rate and total fertility rate for the G7 countries from 1960 to 2006 using panel unit root, panel cointegration, Granger causality and long-run structural estimation. The article’s main findings are that the female labour force participation rate and total fertility rate are cointegrated for the panel of G7 countries; that long-run Granger causality runs from the total fertility rate to the female labour force participation rate and that a 1% increase in the total fertility rate results in a 0.4% decrease in the female labour force participation rate for the G7 countries.     

Education,labor-force participation,and fertility in the USSR

The effect of education on Soviet fertility and female labor participation is analyzed in terms of the neoclassical theory of the household. The hypotheses are tested by multivariate analysis of Soviet census data. The main findings are that the effect of education on urban fertility is opposite that in the West; in the USSR female education has a predominantly positive effect and male education a negative effect. Rural fertility is dominated by strong interaction between male and female education. A substantial portion of the total effect of education on fertility operates indirectly, through female labor participation. The results imply a backward-bending female labor-supply curve.     

Female labour force participation,fertility and infant mortality in Australia: some empirical evidence from Granger causality tests

This study applies Granger causality tests within a multivariate error correction framework to examine the relationship between female participation rates, infant mortality rates and fertility rates for Australia using annual data from 1960 to 2000. Decomposition of variance and impulse response functions are also considered. The main findings are twofold. First, in the short run there is unidirectional Granger causality running from the fertility rate to female labour force participation and from the infant mortality rate to female labour force participation while there is neutrality between the fertility rate and infant mortality rate. Second, in the long run both the fertility rate and infant mortality rate Granger cause female labour participation.     

Fertility and the puzzle of female employment in the Middle East and North Africa

Female labour force participation rates across the Middle East and North Africa (MENA) region have remained low for over four decades even though, in the same period, women's education rapidly increased and fertility rates substantially decreased. This study provides a better understanding of this surprising phenomenon by testing whether the number of children affects the mother's labour supply (using twins at first birth as an instrumental variable.) Despite a strong first stage, it does not find statistically significant effects in the second stage, even in the combined sample of over 100,000 observations. This non‐result, however, does not rule out that fertility affects women's employment in these countries. But it rejects impacts larger than 0.09. Similar twin‐studies in the United States found effects between 0.12 and 0.31. The paper discusses the implications of this result in understanding the puzzle of female participation in MENA and in designing policies to increase women's employment.     

Looking for the workforce: the elderly,discouraged workers,minorities, and students in the Baltic labour markets

This paper looks at the evolution of the labour markets in Estonia, Latvia, and Lithuania since the beginning of transition until 2003, with a particular focus on labour force participation. How did labour supply in the Baltic countries respond to changes in minimum wages, unemployment benefits and retirement regulation? Do the marked differences in labour market policies between the countries result in different patterns of participation? What are the obstacles to and driving forces of participation? We find that relative contribution of participation and demographic trends to the dynamics of the labour force varied substantially both over the years and across the three countries. Participation, in turn, has been shaped by sometimes complicated interactions between schooling decisions of the youth, retirement, policy changes, and external shocks. Resulting differences in trends and patterns are quite substantial, indicating that there is a room for increasing participation in each of the countries. Panel data analysis of determinants of participation and discouragement based on labour force survey data suggests that increasing after-tax real minimum wage has significant positive effects on participation and reduces discouragement in Lithuania. In Estonia, by contrast, a positive effect of minimum wage on participation is found only for teenagers of both genders and for young males. We do not find any evidence that partner’s wage has a negative effect on participation. Ethnic minorities, especially females, in all three Baltic countries are less likely to be in the labour force, other things equal.     

The macroeconomics of the quiet revolution: Understanding the implications of the rise in women’s participation for economic growth and inequality

We study the impact of the rise in female labor supply on the economic performance of the United States over the period 1967–2002 through the lens of a calibrated structural model. The model features all the key forces behind the increase in female participation (the “Quiet Revolution”): (1) the decline in marriage rates, (2) the narrowing gender wage gap, (3) the preference (or cultural) shift towards market work, and (4) the change in women’s bargaining power within the household. We find that preference shifts and the rise in relative wages of women were the most important driving forces behind rising women’s participation, while changes in marriage patterns have also had a sizeable effect. We conclude that half of the growth in US earnings per capita over this period can be traced to growth in female labor supply. We also find that the rise in female labor supply has had offsetting effects on income inequality and, therefore, its overall role has been negligible relative to skill-biased demand shifts and rising residual wage volatility.