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Title: Female Employment and Fertility - The Effects of Rising Female Wages

Citation Type: Working Paper

Publication Year: 2012

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Abstract: Increases in female employment and falling fertility rates have often been linked to rising female wages. However, over the last 30 years the US total fertility rate has been fairly stable while female wages have continued to grow. Over the same period, we observe that women's hours spent on housework have declined, but men's have increased. I propose a model with a shrinking gender wage gap that can capture these trends. While rising relative wages tend toincrease women's labor supply and, due to higher opportunity cost, lower fertility, they also lead to a partial reallocation of home production from women to men, and a higher use of labor-saving inputs into home production. I find that both these trends are important inunderstanding why fertility did not decline to even lower levels. As the gender wage gap declines, a father's time at home becomes more important for raising children. When thedisutilities from working in the market and at home are imperfect substitutes, fertility can stabilize, after an initial decline, in times of increasing female market labor. That parents can acquire more market inputs into child care is what I find important in matching the timing of fertility. In a mode l extension, I show that the results are robust to intrahousehold bargaining.

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Authors: Siegel, Christian

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Publication Number: 1156

Institution: London School of Economics

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Data Collections: IPUMS USA

Topics: Fertility and Mortality, Gender, Labor Force and Occupational Structure

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