An investigation of cointegration and causality between fertility and female labour force participation

Both economists and demographers have long been interested in the nature of the relationship between fertility rate (BR) and female labor force participation (FR). Earlier work suggests an inverse relationship between BR and FR, except in preindustrial countries. The author applies Hsiao's version of the Granger causality method to examine the causality between BR and FR using transformed US data for the period 1948-93. An unidirectional causality is found to run from BR to FR with no feedback. These results confirm the hypothesis that the presence of small children discourages women from seeking employment outside of the home. Employment does not, however, affect a woman's decision to have children.     

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.     

Dynamics of female labour force participation in France

This article formulates and estimates a structural intertemporal model of labour force participation. Relying on theoretical characterizations derived from an economic model of lifetime behaviour, we estimate a dynamic probit model with correlated random effects using longitudinal data to allow for a dynamic structure. The model is applied to a panel of married women drawn from the 1997–2002 French Labour Force surveys in order to represent their participation behaviour. It is estimated by maximum simulated likelihood. Our results show that women’s decisions to go out to work are characterized by significant state dependence, unobserved heterogeneity and negative serial correlation in the transitory error component. In addition, we find that the presence of young children in a woman’s household reduces her labour participation, but unequally according to their age and number. As expected, educational level has a positive impact on women’s participation. Last, a rise in the husband’s wage is found to raise female participation initially and to lower it subsequently. This empirical finding suggests that leisure may not systematically be a normal good, contrary to what is frequently assumed in the literature.     

The evolution of female labour force participation in urban China

Starting from the late 1980s, despite rapid economic growth, female labour force participation in urban China has shown a general declining trend. Using repeated cross‐sections from the Chinese Household Income Project Series (CHIP), this paper attempts to systematically relate the decrease in the labour force participation of married women to the socio‐economic changes happening in urban China during the same period of time. Adopting both linear and nonlinear decomposition techniques, the results indicate that the changes in married women's labour force participation during the periods 1995–2002 and 2007–2013 can be explained by the concurrent changes in the distribution of socio‐economic variables, while the changes during the periods 1988–1995 and 2002–2007 are mostly driven by the leftward shift of married women's participation function.     

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.     

The effect of fertility on labour force participation: The Spanish evidence

Abstract. The aim of this paper is to estimate the effect of fertility on the decision of labour force participation of married females in Spain, allowing for the existence of unobserved characteristics that affect both fertility and participation. We use a pooling of five waves of the European Household Panel for Spain (1994–1998). Results indicate that not taking into account the unobserved characteristics that affect both variables imposes on average a strong downward bias on the true effect of fertility on participation. This bias is especially strong for highly educated females. We are grateful to Raquel Carrasco and an anonymous referee for helpful comments. Financial support from Gobierno Vasco (PI-1999-160)), Ministry of Education and Science (BE2000-1394), Instituto de la Mujer and Universidad del País Vasco (UPV 00035.321-13511/2001) is gratefully acknowledged.     

Unemployment and labour force participation in Spain

This article examines the relationship between the unemployment rate and the labour force participation rate in Spain. Cointegration analysis is performed for aggregate, male and female time-series. Results suggest that there is no a long-run relationship between the two variables for the aggregate and male cases. However, the findings support a long-run relationship between the two variables for the female time-series. Thus, the unemployment invariance hypothesis is supported in the two former cases but not in the latter.     

Asymmetric labour force participation decisions

This article finds compelling evidence of asymmetric labour force participation decisions across demographic groups in response to changes in labour market conditions. This behaviour is consistent with predictions from the standard labour-leisure choice model and suggests that asymmetry in individual behaviour plays some role in the observed asymmetry of the aggregate unemployment rate. It is estimated that the weighted average difference in response to a one percentage point change in unemployment rates is sizeable when compared to the average monthly change in the aggregate labour force.     

Unemployment and labour force participation in Turkey

This article investigates the relationship between labour force participation rate and unemployment rate in Turkey a developing country. Cointegration analysis is carried out for the aggregate and gender-specific series. The findings indicate that there is no long-run relationship between labour force participation and unemployment rates in Turkey. Thus, unlike in the case of the developed countries, the unemployment invariance hypothesis is supported in Turkey.     

Dynamics of fertility and labour force participation of Canadian women in 1971 and 1981: a cohort approach

The authors analyze the relationship between labor force participation and fertility in Canada using data from the Public Use Sample Tapes from the 1971 and 1981 censuses. Factors considered include age, religion, educational status, and marital status. The authors conclude that "labour force participation of women seems to have less influence on fertility compared to [the] fertility effect on labour force participation."     

The impact of trade openness on labour force participation rate

In this article, we investigate the impact of trade openness on labour force participation rate. We use tariff rate as the main indicator of trade openness and we employ the number of regional trade agreements and the average tariff rate in the neighbours’ countries as instrumental variables to diminish the endogeneity problem of the tariff rate. We find that trade openness increases the participation rate which is economically and statistically significant. The results show that this correlation is robust under controlling for different variables and using various specifications. We find that 10 percentage point increase in tariff rate lowers the participation rate by 4–6 percentage point and this relationship is more severe in the long run. Finally, we show that changes in labour force population accounts for about 27% of changes in the unemployment rate following a trade liberalization.     

Family labour force participation: Multinomial logit estimates

Studies of labour force participation choices are mostly aimed at explaining determinants of participation for individuals. The objective of this study is the empirical estimation of the parameters of family participation decisions.

Family participation decisions can be analysed as a choice problem of a family between a finite number of distinct alternatives. The appropriate estimation procedure for a model involving choice among multiple discrete alternatives requires a statistical technique different from ordinary least squares. In this study I use the multinomial logit model. A logit model allows me to explain the probability that a particular participation alternative will be chosen by a family as a function of a set of independent variables.

It is found that economic variables such as wage rates and wealth, play a significant role in affecting the probabilities of choosing a particular labour force participation alternative. This study shows that an increase in the market wage for a family member not only increases the probability of labour force participation for that family member, but at the same time also reduces the probability of participation for his or her partner. Hence there is both a pure and a cross-substitution effect in participation. There is also an income effect. As wealth increases families will, in some sense, buy more leisure. Furthermore, they will allocate the extra leisure in a certain order: it is found in this study that the wife's probability of participation reduces sooner and faster than the husband's probability, as wealth increases.     

Informal parental care and female labour supply in Japan

Using the Japanese Study of Aging and Retirement, Japan’s first globally comparable panel survey of the elderly, we estimate the effect on female employment in Japan due to the provision of informal parental care. We observe that informal parental care has little impact on female employment, after controlling for endogeneity of informal care or individual unobserved time-invariant heterogeneity. This finding is consistent with those observed in Europe and the US, underscoring a limited association between care and work in Japan, which is facing ageing at the fastest pace among advanced economies.     

How house price appreciation affects homeowners' labour force participation

This paper investigates the effects of house price appreciation on homeowners' labour force participation (LFP). Although economic theories predict that housing capital gains will reduce labour supply, empirical evidence from urban China revealed that house price appreciation significantly boosts homeowners' LFP. Heterogeneous analyses indicate that LFP behaviour is more likely to be affected by house price appreciation for female and younger homeowners. Furthermore, homeowners living in provinces with greater house price appreciation tend to be more active in job participation than those living in provinces with lower price appreciation.     

Female labour force participation in an era of organizational and technological change

Abstract The supply of skilled female labour increased significantly at the beginning of the twentieth century as women assumed positions in the newly created clerical workforce. Evidence suggests that despite this increase in labour supply, the wage paid to female clerical workers increased over the period and that the ratio of female clerical wages to male manufacturing wages was roughly constant. These labour market facts can be accounted for in a dynamic general equilibrium model in which an exogenous increase in human capital induces an increase in demand for skilled clerical workers. While induced technological change that favours skilled workers may account for the observed increase in female real wages, explaining the stagnate relative weekly wages paid to female clerical workers requires a framework that includes organizational change.     

On the estimation of the effect of labour participation on fertility

In this paper we consider the estimation of the causal effect of female labour market status (participation and employment) on fertility. We focus on the sensitivity of the estimated effect to (i) the assumptions about the exogeneity of labour market status; and (ii) the time interval between the measurement of fertility and employment status. Using Spanish quarterly data, we estimate a switching probit model that accounts for the joint determination of both variables. In order to obtain a behavioural effect of the former on the latter, we look at the timing of conception instead of the timing of birth, and present alternative sets of estimates depending on the accuracy with which conception is measured (yearly or quarterly). Our results show a positive although non-significant effect of participation and employment on the probability of having the first child, once the sample of women who conceive in the same quarter (or one quarter later) in which labour market status is measured and the endogeneity between both variables is accounted for. We find that annual data tend to over-estimate the negative effect of employment or participation on the probability of having a child, but the main biases appear when looking at the effect of participation. We are grateful to Adrian Kalwij, Daniel Miles and two anonymous referees for helpful comments on this work. All remaining errors are our own.     

Social norms and female labor force participation in urban China

This study investigates the impact of social norms on the labor supply decision of married women in urban China. Our estimation results indicate that men raised by non-working mothers are more likely to support traditional gender roles, are more averse to having working wives, and tend to be less productive or less willing to engage in housework than other men. Consequently, the labor force participation rate of married women with non-working mothers-in-law is 5–18 percentage points lower than that of married women with working mothers-in-law in urban China.     

Effects of female labour force attachment on health in Australia

This study examines the impact of female labour force attachment on health in Australia, where health care is socially provided. Longitudinal panel data from Women’s Health Australia is used in a metric analysis to capture the impact of labour market attachment on the physical component health score of relatively young and older female workers. After controlling for the healthy worker effect – wherein firms hire and retain the healthiest workers – and other health‐related changes in socio‐economic status, the analysis suggests that even a moderate attachment to the paid labour force has benevolent effects on health relative to no or marginal attachment. Given the existing social structure in Australia, remunerative work generally appears to enhance the health of young women and arrest the decline of health for older female workers.