Labor Market Institutions and Fertility

Ezgi Kaya, Virginia Sánchez-Marcos and Nezih Guner
Authors registered in the RePEc Author Service: Virginia Sanchez-Marcos

No 1297, Working Papers from Barcelona School of Economics

Abstract: The total fertility rate is as low as 1.3 in some high-income countries, and factors behind such low levels are not well understood. We show that uncertainty created by dual labor markets, the coexistence of temporary and open-ended contracts, and the inflexibility of work schedules are crucial to understanding low fertility. We focus on college-educated women and document that temporary contracts are associated with a lower probability of first birth using rich administrative data from the Spanish Social Security records. With Time Use data, we also show that women with children are less likely to work in jobs with split-shift schedules, with a long break in the middle of the day. Split-shift schedules present a concrete example of inflexible work arrangements and fixed time cost of work. We then build a life-cycle model in which married women decide whether to work or not, how many children to have, and when to have them. Reforms that eliminate duality or split-shift schedules increase the completed fertility of college-educated from 1.54 to around 1.7. These reforms also increase women's labor force participation and eliminate the employment gap between mothers and non- mothers. Reforming these labor market institutions and providing childcare subsidies increase fertility to 1.86.

Keywords: fertility; Labor market institutions; temporary contracts; split-shift schedules; childcare subsidies (search for similar items in EconPapers)
JEL-codes: E24 J13 J21 J22 (search for similar items in EconPapers)
Date: 2021-11
New Economics Papers: this item is included in nep-dem and nep-dge
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

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Related works:
Journal Article: LABOR MARKET INSTITUTIONS AND FERTILITY (2024)
Working Paper: Labor Market Institutions and Fertility (2024)
Working Paper: Labor Market Institutions and Fertility (2024)
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