Fertility and Family Labor Supply

Katrine M. Jakobsen, Thomas H. Jorgensen and Hamish W. Low

No WP 2025-26, Working Paper Series from Federal Reserve Bank of Chicago

Abstract: We study how fertility decisions interact with labor supply and human capital accumulation of men and women. First, we use longitudinal Danish register data and tax reforms to show that increases in wages of women decrease fertility while increases in wages of men increase fertility. Second, we estimate a life-cycle model to quantify the importance of fertility adjustments for labor supply and long-run gender inequality. Wage elasticities of women are more than 10% lower if fertility cannot be adjusted. Finally, we show that the long-term consequences of human capital depreciation around childbirth are an important driver of the long-run gender wage gap in the model.

Keywords: Fertility; Labor supply; human capital accumulation; Gender inequality; Tax reform (search for similar items in EconPapers)
JEL-codes: D15 H24 J13 J22 (search for similar items in EconPapers)
Pages: 127
Date: 2025-12-19
New Economics Papers: this item is included in nep-dge and nep-lma
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Persistent link: https://EconPapers.repec.org/RePEc:fip:fedhwp:102277

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DOI: 10.21033/wp-2025-26

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