Family-Friendly Policies and Fertility: What Firms Have to Do with It?

Olympia Bover, Alessandro Ruggieri, Carlos Sanz, Yuliya Kulikova and Nezih Guner

No 1568, Working Papers from Barcelona School of Economics

Abstract: Family-friendly policies aim to help women balance work and family life, encouraging them to participate in the labor market. How effective are such policies in increasing fertility? We answer this question using a search model of the labor market where firms make hiring, promotion, and firing decisions, taking into account how these decisions affect workers' fertility incentives and labor force participation decisions. We estimate the model using administrative data from Spain, a country with very low fertility and a highly regulated labor market. We use the model to study family-friendly policies and demonstrate that firms' reactions result in a trade-off: policies that increase fertility reduce women's participation in the labor market and lower their lifetime earnings.

Keywords: family-friendly policies; fertility; flexibility; gender gaps; Human Capital Accumulation; search and matching; welfare (search for similar items in EconPapers)
JEL-codes: E24 J08 J13 J18 (search for similar items in EconPapers)
Date: 2026-03
New Economics Papers: this item is included in nep-dge and nep-eur
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