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Analyzing women's employment and fertility rates in Europe: differences and similarities in Northern and Southern Europe
Economic models of household behavior typically yield the prediction that increases in the schooling attainment and wage rates offered to married women will lead to increases in their labor supply and reductions in fertility. However, in Southern European countries low labor market participation rates of married women are observed simultaneously with low birth rates. Several explanations for this apparent anomaly have been proposed that involve characteristics of the institutional environment, most importantly particular rigidities and imperfections that are pervasive in the labor market and peculiar features of the publicly-funded child care system. In regards to the labor market, the fact that part-time employment is extremely rare in Southern European countries compared to Northern European countries is an important factor in accounting for the low employment rates of married women, particularly those with children (Del Boca, 2002). As a consequence, married women are forced to choose between no work and full-time work, neither of which is necessarily their preferred option. Married women who choose to work tend to have full-time work commitments, which is not consistent with having large numbers of children. Moreover, in South Europe even married women who do not work tend to limit their family size, at least in part due to the high unemployment rates among youths: because entry level positions are difficult to find, many children live at home until they find their first "stable'' employment. Thus the labor market indirectly imposes larger fertility costs on Southern Europe families even when the mother does not work; in this way the structure of the labor market acts both directly and indirectly to discourage fertility. Relevant differences exist also in the child care system between North and South Europe in terms of number of slots available and hours of child care provision. In the South Europe institutions regulating the labor market and the social service system have evolved slower than in North Europe and continue to do little to increase the attractiveness of full-time work for women with children. Therefore, family networks seem to compensate for the lack of flexibility of the service system. For example, extended family members, most often grandparents, very often provide child care services which complement the limited services provided by publicly-funded day care facilities. Financial support as well as help in child care has been shown to significantly increase the probability of the mother's working, and especially has an important effect on the probability of mothers' working full-time (Del Boca and Lusardi, 2002). In order to investigate these issues, we use longitudinal data on European households. In particular, we use the European Household Panel (ECHP) to estimate models of participation and fertility decisions in which we examine the households' behavior in terms of labor supply and reproduction as a function of their characteristics and the characteristics of the households in which they live. By performing these comparative analyses we isolate the effect of very idiosyncratic Southern European labor market, financial, and educational institutions on decisions concerning work and having children We use fixed effect and random effect models. While the fixed effect measures only the effect of the variation over the period, the cross section estimator measures both effect of the country variability on the dependent variable at the point of time and the time variation. The cross sectional estimate yields coefficients estimates if households do not systematically differ in terms of any unmeasured variables. We test this restriction using standard Hausman tests in order to choose the most appropriate estimation technique.
Del Boca, Daniela, Pasqua, Silvia, Pronzato, Chiara (2003 May) 'Analyzing women's employment and fertility rates in Europe: differences and similarities in Northern and Southern Europe', EPUNet-2003 Conference.
JEL Codes
Daniela Del Boca, Silva Pasqua, Chiara Daniela Pronzato
Countries included
Austria, Belgium, Denmark, France, Germany, Greece, Ireland, Italy, Netherlands, Portugal, Spain, United Kingdom
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Institutions Involved
Uni. di Torino, Italy
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