Fertility and Family Labor Supply

Katrine Jakobsen, Thomas Jørgensen and Hamish Low

No 965, Economics Series Working Papers from University of Oxford, Department of Economics

Abstract: We study the importance of fertility adjustments for labor market responsiveness of men and women. First, we use longitudinal Danish register data and tax reforms from 2009 to provide new empirical evidence on fertility adjustments to tax changes. We find asymmetric effects between men and women: Increases in marginal net-of tax wages of women decrease fertility whereas increases in marginal net-of-tax wages of men increase fertility. Second, we quantify the importance of these fertility adjustments for understanding labor supply responses to tax reforms. To this end, we estimate a life-cycle model of family labor supply in which couples choose the timing and number of children, which also replicates the asymmetric fertility adjustments. In the model, allowing fertility adjustments increase the labor supply responsiveness of women by 28%, and, as a result, tax reforms can have larger and more persistent effects.

Date: 2022-03-10
New Economics Papers: this item is included in nep-eur
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Citations: View citations in EconPapers (3)

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Working Paper: Fertility and Family Labor Supply (2022)
Working Paper: Fertility and Family Labor Supply (2022)
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