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Title: Labor Force Participation and Fertility Decisions of Modern Women
Citation Type: Conference Paper
Publication Year: 2011
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Abstract: What is it about the U.S. economy in recent decades that has allowed both the laborforce participation rate of women and the total fertility rate to increase simultaneously,as though life as a mother and life as a working woman no longer conict with oneanother? I study the importance of child care cost in answering this question. Childcare workers' wages have stayed low for decades, keeping the price of child care low.This may have induced the increased use of child care services, enabling more women tobe working mothers and bringing about the increased labor supply of women withoutcausing decreases in fertility. I develop a simple household model, and calibrate itto some of the main cross-sectional features of modern households. The calibratedmodel predicts a stable path of fertility from the early 1980s to the mid 1990s, whilealso predicting increases in labor supply during the same period. It is less successfulin more recent years. Counterfactual calculation indicates that, if child care workers'wages had grown at a rate equivalent to the median wage of young women, U.S. fertilitywould have been substantially lower during the 1980s and the early 1990s, while theparticipation rate would have changed very little. The same model can successfullyreconcile the case of Japan: the increasing labor supply of women and rapidly fallingfertility under a very stable wage distribution since 1980. Lastly, I embed the householdmodel in a general equilibrium framework and calibrate it for two purposes: i) to gaina quantitative sense of the e ects of policy changes in the U.S. since 1980, and ii) tocalculate the potential e ects of low-skill immigrants on the Japanese economy.
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Authors: Okada, Eisuke
Conference Name: 2011 Annual Meeting of the Midwestern Economic Association
Publisher Location: St. Louis, MO
Data Collections: IPUMS USA
Topics: Fertility and Mortality, Gender, Labor Force and Occupational Structure
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