We estimate the effect of fertility on female labor force participation in a cross-country panel data set using abortion legislation as an instrument for fertility. We find a large negative effect of the fertility rate on female labor force participation. The direct effect is concentrated among those aged 20-39, but we find that cohort participation is persistent over time giving an effect among older women. We present a simulation model of the effect of fertility reduction on income per capita, taking into account these changes in female labor force participation as well as population numbers and age structure.
Published as David Bloom & David Canning & Günther Fink & Jocelyn Finlay, 2009. "Fertility, female labor force participation, and the demographic dividend," Journal of Economic Growth, Springer, vol. 14(2), pages 79-101, June.