WHY ARE FERTILITY RATES AND FEMALE EMPLOYMENT RATIOS POSITIVELY CORRELATED ACROSS O.E.C.D. COUNTRIES?

José María Da Rocha and Luisa Fuster ()

International Economic Review, 2006, vol. 47, issue 4, pages 1187-1222

Abstract: We develop a quantitative theory of fertility and labor market participation decisions in order to investigate the role of labor market frictions in generating the observed positive association between fertility and employment among O.E.C.D. countries. We find that unemployment induces females to postpone and space births, which, in turn, reduces the total fertility rate. Moreover, differences in female labor outcomes across the United States and Spain can account for the low fertility rate in Spain relative to the United States. We also find that labor market frictions can generate a positive association between female employment ratios and fertility rates across economies. Copyright 2006 by the Economics Department Of The University Of Pennsylvania And Osaka University Institute Of Social And Economic Research Association.

Date: 2006
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