Labor Market Activities and Fertility

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Labor Market Activities and Fertility
David E. Sahn and Stephen D. Younger
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Introduction

• In poor countries women
• have high fertility
• have high IMR/CMR
• have low education and high morbidity (as do
  their children)
• work
• at home
• in agriculture
• in informal self-employment

• In rich countries, women
• have low fertility
• have low IMR/CMR
• have high education and low morbidity (as do
  their children)
• work
• away from home
• formal wage jobs

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Introduction

• Relations between these factors are complex, with
  important feedbacks, both static and dynamic
• Here, our focus is on how women's labor market
  activity relates to the other factors, especially
  fertility and investments in children

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Policy Relevance

• New employment opportunities for women can reduce
  fertility
• Induced reductions in fertility can increase
  womens employment
• Both factors can lead to a demographic transition
  and to poverty reduction

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Fertility/Work Trade-Off
Labor Market Activity
Fertility (Child Quantity)
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Fertility/Work Trade-Off

• Raising children is womens work in Africa (and
  elsewhere)
• Incompatibility of having children with work
  outside the home in formal wage employment
• no joint production
• inflexible hours in formal jobs
• Other household members may ease this trade-off
• extended family (grandmothers)
• older daughters (child labor)

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Child Quantity/Quality Trade-Off
Labor Market Activity
Fertility (Child Quantity)
Investments in Children (Child Quality)
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Child Quantity/Quality Trade-Off

• A key feature in the economic approach to
  demography and development (Becker/Lewis)
• substitution effects are exceptionally strong
• gross complementarity of work and investments in
  children
• Brings in a dynamic, intergenerational aspect
• Todays well-educated and healthy children are
  tomorrows parents
• parental education and income are clearly linked
  to fertility, labor market choices, and their own
  childrens human capital

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Thinking About Causality

• Work opportunities
• Growth/development
• Wages

• Reproductive Health Services
• Child Care Services

Labor Market Activity
Fertility (Child Quantity)

• Education
• Incomes (ex. mother)
• Norms and customs

Investments in Children (Child Quality)
School fees Public Health Services Health care
costs
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Thinking About Causality

• Work opportunities
• Growth/development
• Wages

• Reproductive Health Services
• Child Care Services

Labor Market Activity
Fertility (Child Quantity)

• Education
• Incomes (ex. mother)
• Norms and customs

Investments in Children (Child Quality)
School fees Public Health Services Health care
costs
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Labor Market Opportunities

• Effect of wage rates on womens time allocation,
  fertility, and investments in children
• substitution effect
• income effect
• note interaction of education with this effect
• Effect of job opportunities
• in rural Africa, opportunities for out-of-home
  work are limited
• some industries prefer female employees
• textiles/garments
• cut flowers

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Thinking About Causality

• Work opportunities
• Growth/development
• Wages

• Reproductive Health Services
• Child Care Services

Labor Market Activity
Fertility (Child Quantity)

• Education
• Incomes (ex. mother)
• Norms and customs

Investments in Children (Child Quality)
School fees Public Health Services Health care
costs
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Thinking About Causality

• Work opportunities
• Growth/development
• Wages

• Reproductive Health Services
• Child Care Services

Labor Market Activity
Fertility (Child Quantity)

• Education
• Incomes (ex. mother)
• Norms and customs

Investments in Children (Child Quality)
School fees Public Health Services Health care
costs
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(Shadow) Costs of Child Quality

• Fees for health services
• School fees
• For example, many African countries have recently
  eliminated school fees. What has been the impact
  on fertility, womens labor market activity, and
  investment in children?
• Clean water and other public health services

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Thinking About Causality

• Work opportunities
• Growth/development
• Wages

• Reproductive Health Services
• Child Care Services

Labor Market Activity
Fertility (Child Quantity)

• Education
• Incomes (ex. mother)
• Norms and customs

Investments in Children (Child Quality)
School fees Public Health Services Health care
costs
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Other Conditioning Factors

• Education
• increases market wages (see argument above)
• may affect attitudes and norms
• but may be jointly determined if women are
  forward-looking
• may also be endogenous, if pregnancy ends
  schooling

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Other Conditioning Factors

• Income from sources other than the mother
• Attitudes, norms, and customs
• key part of modernization theory
• may have powerful interactions with other causal
  variables

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Research Ideas Survey Data

• Use survey data to estimate the impact of wage
  rates and/or labor market conditions on work,
  fertility, and investments in children
• Lam and Anderson (2002) in South Africa
• Use survey data to estimate the impact of
  fertility shocks on labor force participation
  and investments in children
• twins shock - Rozensweig and Wolpin (1980)
• unwanted births Lloyd, et.al. (2006)
• Many other analogous possibilities for any of the
  exogenous variables in the diagram

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Research Ideas Field Experiments

• Very popular in development economics these days
• Avoids the econometric problems that plague
  survey research
• Example randomized delivery of community and
  reproductive health services in Northern Ghana
  Niagia (2005)

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Research ideas Case Studies on Impact of
Economic Development

• Difficult to investigate interesting questions of
  effect of economic development on employment,
  fertility and human capital
• Consider conducting case studies
• Grameen Bank-style microcredit
• Impact of export processing zones on fertility
  and female labor force participation in Mauritius
  - Bheenick and Shapiro (1989)

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Research Ideas Dynamics

• Intergenerational Dynamics
• models so far are static decisions for a woman
  or family at one point in time
• Child Labor
• may help to relax a mothers binding time
  constraint that is key to many arguments
• but at the cost of another vicious circle

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Concluding Thoughts and Extensions

• Very little of any of this type of research in
  Africa the field looks wide open
• Vast opportunities for AERC network

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