Fertility, Female Labor Supply and Public Policy

Patricia Apps () and Ray Rees

No 409, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Historically, in virtually all developed economies there seems to be clear evidence of an inverse relationship between female labor supply and fertility. However, particularly in the last decade or so, the relationship across countries has been positive: for example countries like Germany, Italy and Spain with the lowest fertility rates also have the lowest female participation rates. We accept the hypothesis that the reason for this lies in the combined effects of a country’s tax system and system of child support, and we have sought to clarify this theoretically, using an extended version of the Galor-Weil model. The results suggest that countries with individual rather than joint taxation, and which support families through improved availability of alternatives to domestic child care, rather than through direct child payments, are likely to have both higher female labor supply and higher fertility. These results are strengthened when we take account of the heterogeneity among households that undoubtedly exists.

Keywords: labor supply; Fertility; taxation (search for similar items in EconPapers)
JEL-codes: H31 H53 J13 J22 (search for similar items in EconPapers)
Pages: 33 pages
Date: 2001-12
New Economics Papers: this item is included in nep-lab, nep-pbe and nep-pke
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Citations: View citations in EconPapers (27)

Published - revised version published as 'Fertility, Taxation and Family Policy' in: Scandinavian Journal of Economics, 2004, 106 (4), 745-763

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Working Paper: Fertility, Female Labor Supply and Public Policy (2010)
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