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Grandmothers' Labor Supply

Wolfgang Frimmel (), Martin Halla (), Bernhard Schmidpeter and Rudolf Winter-Ebmer ()

No 12487, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: The labor supply effects of becoming a grandmother are not well established in the empirical literature. We estimate the effect of becoming a grandmother on the labor supply decision of older workers. Under the assumption that grandmothers cannot predict the exact date of conception of their grandchild, we identify the effect of the first grandchild on employment (extensive margin). Our Timing-of-Events approach shows that having a first grandchild increases the probability of leaving prematurely the labor market. This effect is stronger when informal childcare is more valuable to the mother. To estimate the effect of an additional grandchild (intensive margin), we assume that the incidence of a twin birth among the third generation is not correlated with unobserved determinants of the grandmother's labor supply (first generation). Our respective 2SLS estimation shows a significant effect of further grandchildren. Our results highlight the important influence of the extended family on the decisions of older workers and point to mediating effects of different institutional settings.

Keywords: Female labor supply; grandchildren; instrumental variables; timing of events (search for similar items in EconPapers)
JEL-codes: J13 J14 J22 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-age, nep-dem and nep-lab
Date: 2017-12
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Working Paper: Grandmothers’ Labor Supply (2017) Downloads
Working Paper: Grandmothers' Labor Supply (2017) Downloads
Working Paper: Grandmothers' Labor Supply (2017) Downloads
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