Fertility,household structure,and parental labor supply: Evidence from China

This study examines the effects of fertility on household structure and parental labor supply in China. To solve the endogeneity problem, we use a unique survey on households with twin children and a comparison group of non-twin households. The ordinary least squares estimates show a negative correlation between fertility and parental labor supply in rural China. Using twinning as a natural experiment, we do not find evidence on the negative effects of fertility on parental labor supply. By contrast, we find that the twinning-induced increase in fertility significantly enhances the coresidence of grandparents in rural China. We suggest that the negative effects of fertility on parental labor supply are mitigated by the childcare provided by grandparents in rural China. We also find that fertility does not induce coresidence of grandparents in urban China. Our results have important implications for population and public childcare policies.     

Family Policies and Female Employment in Japan

This paper discusses how childcare and parental leave policies affect female employment by reviewing the international evidence and recent papers on Japan. These papers estimate causal effects of policies by exploiting policy changes, which is a more credible identification strategy than those applied in earlier observational studies. The literature on parental leave finds that a more generous leave package tends to delay mothers’ return to work, but it does not have detrimental effects on maternal labour supply in the medium to long run. Some papers also find that provision of job protection for around 1 year can increase maternal employment, but longer job protection has little additional effects. The literature on childcare policies finds that maternal employment does not necessarily increase, because the expansion of childcare may crowd out informal childcare arrangements, such as care provided by grandparents. Findings by recent papers on Japan are largely consistent with the international evidence.     

Fertility Decisions and Gender Differences in Labor Turnover, Employment, and Wages

A striking observation of the U.S. and other labor markets is the weak position of women in terms of job attachment, employment, and earnings relative to men. We develop a model of fertility and labor market decisions to study the impact of fertility on gender differences in labor turnover, employment, and wages. In our framework, individuals search for jobs and accumulate general (experience) and specific (tenure) human capital when they work. They can also increase their wage by moving to a job of higher quality. Labor market decisions (e.g., job acceptance and job mobility) may differ across genders: females that give birth may decide to interrupt their labor market attachment in order to enjoy the value of staying at home with their children. The model economy is successfully calibrated to match aggregate statistics in terms of fertility, employment, and wages. We find that fertility decisions generate important gender differences in turnover rates, with long lasting effects in employment and wages. These differences in labor turnover account for almost all the U.S. gender wage gap that is attributed to labor market experience by Blau and Kahn (2000, Journal of Labor Economics15(1), 1–42). The model also implies a very small role of tenure capital in accounting for wage differences between males and females (gender gap), and between females with and without children (family gap). Journal of Economic Literature Classification Numbers: E24, J13, J21, J31.     

The effect of the timing and spacing of births on the level of labor market involvement of married women

We analyze the effect of the timing and spacing of births on the labor supply of married women in a framework that accounts for the endogeneity of the labor market and fertility decisions, for the heterogeneity of the effects of children on labor supply and their correlation with the fertility decisions, and for the correlation of sequential labor market decisions. Delaying the first birth leads to higher pre-natal levels of labor market involvement and reduces the negative effect of the first child on labor supply. The effect of the second child increases with the spacing of the two births as women, returning to work after the first birth, finance child care time increasingly through reductions in market time. Individual heterogeneity is considerable; women with lower propensity for children have the first birth later in life and space subsequent births more closely together, work more before the birth of the first child, but face larger effects of children on their labor supply.     

Parental Leave Policy and Gender Equality in Europe

This article uses data from 2008–10 to analyze parental leave policies in twenty-one European countries and their influence on men's behavior. It examines entitlement characteristics, such as nontransferability, duration, payment, compulsory period, and other policies to assess their effect on the proportion of leave men use out of the total parental leave in each country. The findings, which suggest that a large majority of men take nontransferable and highly paid leave, and a small minority take other types, provide the basis for developing the Parental Leave Equality Index (PLEI). PLEI ranks countries by the degree to which parental leave policies reinforce or diminish the gendered division of labor. Results indicate that although Iceland's parental leave policies do the most to advance gender equity, no country has equal, nontransferable, and well-paid leave for each parent. This policy arrangement would be a precondition to men's and women's equal participation in childcare.     

Causal Effects of Paternity Leave on Children and Parents

Reserving a share of the parental leave period for fathers is considered necessary in order to induce fathers to take leave, and to increase men's participation in child‐rearing. We investigate how a parental leave reform directed towards fathers affected leave‐taking, and, in turn, children's and parents' long‐term outcomes. A paternal leave quota greatly increases the share of men taking paternity leave. We find evidence that children's school performance improves as a result, particularly in families where the father has higher education than the mother. We find no evidence that paternity leave counters the traditional allocation of parents' labor supply.     

WHY ARE FERTILITY RATES AND FEMALE EMPLOYMENT RATIOS POSITIVELY CORRELATED ACROSS O.E.C.D. COUNTRIES?*

We develop a quantitative theory of fertility and labor market participation decisions in order to investigate the role of labor market frictions in generating the observed positive association between fertility and employment among O.E.C.D. countries. We find that unemployment induces females to postpone and space births, which, in turn, reduces the total fertility rate. Moreover, differences in female labor outcomes across the United States and Spain can account for the low fertility rate in Spain relative to the United States. We also find that labor market frictions can generate a positive association between female employment ratios and fertility rates across economies.     

Labor Market Regimes,Family Policies,and Women's Behavior in the EU

Using the EU-SILC database (2005–06) for twenty-four European countries, this article develops a comparative perspective on labor market situations of women and mothers with very young children in relation to labor market institutions and policies (especially childcare and leave schemes). Using multilevel multinomial logit models, our results show firstly the heterogeneity of national arrangements of women's labor market integration in Europe (including among new member states). Secondly, our results show the links between some national policy variables and women's behavior, despite the fact that individual factors explain labor market situations the most. Women's employment is positively related to formal childcare and to characteristics of national labor market regimes. The use of informal childcare is associated with lower women's employment rates, which might be explained by a substitution effect. The employment rate of mothers with very young children is positively related to public childcare and negatively to parental leave.     

Gender-Equalizing Family Policies and Mothers' Entry into Paid Work: Recent Evidence From Norway

Universal parental leaves with job protection and earnings compensation increase women's labor market attachment, but very long leaves may have negative consequences at both individual and societal levels. Using panel data from the period 1996–2010, we study whether it is possible to offset the potential negative effects on women's labor supply of long parental leaves by policies targeted especially at fathers, and policies making formal daycare cheaper and more easily available. Norway is used as example, since all recent extensions in the parental leave scheme have been reserved for fathers and at the same time the daycare sector has expanded rapidly. We find that Norwegian mothers did enter work faster after childbirth in the late 2000s than a decade earlier. The latest initiatives may thus have contributed to a shortening of women's career interruptions and a more equal division of paid and unpaid work among parents.     

UNANTICIPATED EFFECTS OF CALIFORNIA'S PAID FAMILY LEAVE PROGRAM

We examine the effect of California paid family leave (CPFL) on young women's labor force participation and unemployment, relative to men and older women. CPFL enables workers to take at most 6 weeks of paid leave over a 12‐month period in order to bond with new born or adopted children, or to care for sick family members or ailing parents. The policy benefits women, especially young women, as they are more prone to take such a leave. However, the effect of the policy on overall labor market outcomes is less clear. We apply difference‐in‐difference techniques to identify the effects of the CPFL legislation on young women's labor force participation and unemployment. We find that the labor force participation rate, the unemployment rate, and the duration of unemployment among young women rose in California compared to men (particularly young men) and older women in California, and to other young women, men, and older women in states that did not adopt PFL. The latter two findings regarding higher young women's unemployment and unemployment duration are unanticipated effects of the CPFL program. We utilize robustness checks as well as unique placebo tests to validate these results.(JEL H43, J13, J18, J48)     

Examining SNAP and TANF caseload trends,responsiveness, and policies during the COVID-19 pandemic

Temporary Assistance for Needy Families (TANF) and Supplemental Nutrition Assistance Program (SNAP) cases increased by 3.3 million between March and June 2020, their largest quarterly increase ever. During the pandemic, many states adopted a wide set of policies and procedures to facilitate program enrollment, retention, and eligibility. I track these policies and create a pandemic policy index measuring state generosity. States that adopted more generous policies experienced larger TANF and SNAP caseload growth, especially eligibility policies such as exempting TANF work requirements or SNAP P-EBT availability. Analyzing the caseload relationship to labor markets, caseloads were less responsive to unemployment rate changes during the pandemic relative to the pre-pandemic period.     

Employment to output elasticities and reforms towards flexicurity: Evidence from OECD countries

Labor market reforms in the direction of “flexicurity” have been widely endorsed as a means to increase an economy's ability to adjust to negative shocks while offering adequate social safety nets. This paper empirically examines how such reforms influence employment's responsiveness to output fluctuations (employment–output elasticity). To address this question, we employ a single equation error correction model with policy interactions on a panel of OECD countries, which also incorporates the period of the Great Recession, and distinguish between passive and active labor market policy types. Flexicurity is represented by three policy measures: unemployment benefit generosity, the flexibility of hiring and firing rules, and spending on active labor market policies. We find that the effects of any single policy change are shaped by the broader existing policy mix within which it takes place. A hypothetical flexicurity reform towards the policy mix of Denmark, a well-known example of the flexicurity regime, is found to increase or leave unchanged countries' short-run employment–output elasticities, depending on the initial policy mix. These results are robust to accounting for a large set of additional labor market institutions.     

Fertility, female labor force participation, and the demographic dividend

We estimate the effect of fertility on female labor force participation in a panel of countries using abortion legislation as an instrument for fertility. We find that removing legal restrictions on abortion significantly reduces fertility and estimate that, on average, a birth reduces a woman’s labor supply by almost 2 years during her reproductive life. Our results imply that behavioral change, in the form of increased female labor supply, contributes significantly to economic growth during the demographic transition when fertility declines.      

Fertility and maternal labor supply: Evidence from the new two-child policies in urban China

The One-Child Policy which had been implemented for over 30 years in China was formally relaxed in 2010s. The New Two-Child Policies gradually allowed all couples to have two children. This paper investigates the impact of the New Two-Child Policies on individual behavior related to birth and maternal labor supply. We find number of children significantly increased after the implementation of the New Two-Child Policies. Using the New Two-Child Policies as an exogenous variation in fertility, we find negative effect of number of children on maternal labor supply in both extensive and intensive margin. Our results have important implications for the further relaxation of birth-control policies.     

How does female labor force participation impact on housing values?

Female labor force participation (FLFP) and household wealth are two main topics of interests to economists for long time. The objective of this study is to investigate the response of housing values, household wealth, to female labor force participation using panel level data in the U.S. states. We develop static and dynamic estimation models using state-level data in the U.S. from 2005 to 2013. The results show the FLFP rate and per capita income have a strong positive effect on housing values, while the number of units per capita has a negative effect on housing values in the state. We find that a 10% increase in FLFP will result in an increase of about 12.5% on housing values. Additionally, increasing per capita income by 10% on average will cause housing values to rise by 9%, however, a 10% rise in the number of units per capita will decrease housing values by 30%. The results assist economists and policy makers in assessing policies to optimize decisions in labor market and housing market.     

Children's Migration Decisions and Elderly Support in China: Evidences from CHARLS Pilot Data

The purpose of this paper is to explain the determinants of migration in China with special concern for elderly support based on evidences from China Health and Retirement Longitudinal Study (CHARLS) pilot data. We find parents’ needs for care significantly affect adult children’s participation in migrant labor market. Joint family decisions have also been made among adult siblings as far as elderly support is concerned. Different patterns of migrant labor force participation in Zhejiang and Gansu provinces largely reflect the differences between their respective migrant labor markets. Understanding of these new patterns of China’s internal migration helps policy makers in China and other developing counties formulate effective social policies, and consequently, a more appropriate urbanization path.     

A quantitative theory of the gender gap in wages

This paper measures how much of the gender wage gap over the life cycle is due to the fact that working hours are lower for women than for men. We build a quantitative theory of fertility, labor supply, and human capital accumulation decisions to measure gender differences in human capital investments over the life cycle. We assume that there are no gender differences in the human capital technology and calibrate this technology using wage–age profiles of men. The calibration of females assumes that children involves a forced reduction in hours of work that falls on females rather than on males and that there is an exogenous gender gap in hours of work. We find that our theory accounts for all of the increase in the gender wage gap over the life cycle in the NLSY79 data. The impact of children on the labor supply of females accounts for 56% and 45% of the increase in the gender wage gap over the life cycle among non-college and college females, while the rest is due to the exogenous gender differences in hours of work.     

Fertility,Female Labor Supply,and Family Policy

The present paper develops an overlapping generations general equilibrium model for Germany in order to study the impact of public policy on household labor supply and fertility decisions. Starting from a benchmark equilibrium which reflects the current German family policy regime we introduce various reforms of the tax and child benefit system and quantify the consequences for birth rates and female labor supply. Our simulations indicate three central results: First, higher transfers to families (either direct, in‐kind or via family splitting) may increase birth rates significantly, but they may come at the cost of lower female employment. Second, the introduction of individual taxation (instead of joint taxation of couples) would increase female employment but might further reduce current birth rates in Germany. Third, it is possible to increase birth rates and female employment rates simultaneously if the government invests in child care facilities for children of all ages.     

Comparing Care Regimes in Europe

Throughout Europe, the family is still an important provider of care, but welfare state policies of individual countries may support and/or supplement the family in different ways, generating different social and economic outcomes. This article compares and categorizes care strategies for children and elderly persons in different member states of the European Union, while also taking into account the varied modalities for providing care, like leave arrangements, financial provisions, and social services. In EU countries, care regimes function as “social joins” ensuring complementarity between economic and demographic institutions and processes. As these processes and institutions change, they provide impetus for care regimes to change as well. However, because ideas and ideals about care are at the core of individual national identities, care regimes also act as independent incentive structures that impinge on patterns of women's labor market participation and fertility.     

THE EFFECT OF MATERNAL EMPLOYMENT AND CHILD CARE ON CHILDREN'S COGNITIVE DEVELOPMENT*

This article develops and estimates a dynamic model of employment and child care decisions of women after childbirth to evaluate the effects of these choices on children's cognitive ability. We use data from the National Longitudinal Survey of Youth to estimate it. Results indicate that the effects of maternal employment and child care on children's ability are negative and sizable. Having a mother that works full‐time and uses child care during one year is associated with a reduction in ability test scores of approximately 1.8% (0.13 standard deviations). We assess the impact of policies related to parental leave and child care on children's outcomes.