A Dynamic Structural Model of Contraceptive Use and Employment Sector Choice for Women in Indonesia

Uma Radhakrishnan

Working Papers from U.S. Census Bureau, Center for Economic Studies

Abstract: This research investigates the impact of the Indonesian family planning program on the labor force participation decisions and contraceptive choices of women. I develop a discrete choice dynamic structural model, where each married woman in every period makes joint choices regarding the method of contraceptive used and the sector of employment in which to work in order to maximize her expected discounted lifetime utility function. Each woman obtains utility from pecuniary sources, nonpecuniary sources, and choice-specific time shocks. In addition to the random shocks, there is uncertainty in the model as a woman can only imperfectly control her fertility. Dynamics in the model are captured by several forms of state and duration dependence. Women in this model make different choices due to different preferences, differences in observable characteristics, and realization of uncertainty. The choices made by a woman depend on the compatibility between raising children and the sector of employment (including wages). While making decisions regarding contraceptive use, a woman considers the trade-off between costs (monetary and nonmonetary) of having a child and the benefits from having one. The primary source of data for this study is the first wave of the Indonesia Family Life Survey (IFLS 1), a retrospective panel. In my research, I use the geographic expansion and the changing nature of the Indonesian family planning program as sources of exogenous variation to identify the parameters of the structural model. I estimate the model using maximum likelihood techniques with data from IFLS 1 for the periods 1979-1993. Structural model estimates indicate that informal sector jobs offer greater compatibility between work and childcare. Parameter estimates indicate that choices of contraception method and employment sector vary by exogenous characteristics.

Keywords: Family planning; female labor force participation; contraception; formal sector; Indonesia (search for similar items in EconPapers)
JEL-codes: J13 J22 O17 (search for similar items in EconPapers)
Pages: 54 pages
Date: 2010-09
New Economics Papers: this item is included in nep-lab and nep-sea
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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https://www2.census.gov/ces/wp/2010/CES-WP-10-28.pdf First version, 2010 (application/pdf)

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Persistent link: https://EconPapers.repec.org/RePEc:cen:wpaper:10-28

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