Social Institutions and Low Birth Rates

Christine Ho () and Yutao Wang ()
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Christine Ho: School of Economics, Singapore Management University
Yutao Wang: School of Economics, Singapore Management University

No 11-2024, Economics and Statistics Working Papers from Singapore Management University, School of Economics

Abstract: We document three cross-sectional stylized facts on labor supply and family formation. First, female labor force participation (FLFP) and total fertility rates (TFRs) are much lower in Eastern societies compared to Western economies. Second, labor hours and the gender pay gap are much higher in the East than in the West. Third, parents invest more on schooling in Eastern societies compared to Western economies. To account for these features, we develop and estimate a rich heterogeneous-agent model with endogenous marriage, fertility, labor supply, and time and money investment in children. Estimates using data from South Korea and the United States highlight the importance of gender norms and long work hours practices in driving down FLFP while child quality mores drive down fertility in South Korea. Our results suggest that a multi-pronged policy approach or reductions in the gender pay gap may help boost both FLFP and fertility in East Asia.

Keywords: Female labor supply; fertility; child quality; gender norms; long work hours (search for similar items in EconPapers)
JEL-codes: D13 E24 H31 J13 J16 J22 (search for similar items in EconPapers)
Pages: 80 pages
Date: 2024-10-30
New Economics Papers: this item is included in nep-inv, nep-lab and nep-sea
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Persistent link: https://EconPapers.repec.org/RePEc:ris:smuesw:2024_011

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