Skill premium effects on fertility and female labor force supply

María Amaya Iza Padilla and Dolores Ferrero Martínez

No 1988-088X, DFAEII Working Papers from University of the Basque Country - Department of Foundations of Economic Analysis II

Abstract: In the last twenty years the United States has seen a positive relationship between female labor supply and total fertility rates, which differs from the pattern observed over the preceding years. We construct a general equilibrium overlapping generations model capable of generating this changing relationship between fertility and female labor supply. We argue that skilled biased technological change in recent decades has increased the skill premium and has therefore decreased the relative cost of (unskilled) child care services. The positive effect of the increase in female mean wages on fertility rates, and the inducement for labor force participation provided by the reduction in the relative cost of child care services, generated the positive relationship between fertility rates and female labor force participation in the last two decades.

Keywords: female labor supply; fertility rates; child care; skill premium (search for similar items in EconPapers)
Date: 2002
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Dpto. de Fundamentos del Análisis Económico II, = Facultad de CC. Económicas y Empresariales, Universidad del País Vasco, Avda. Lehendakari Aguirre 83, 48015 Bilbao, Spain

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