Fertility, Female Labor Force Participation and the Multiplier Effect

Jocelyn E. Finlay, Harvard University
David E. Bloom, Harvard University
David Canning, Harvard University
Guenther Fink, Harvard University

In this paper we examine the effect of fertility on female labor supply. Using data from the Demographic and Health Surveys, we estimate the effect of fertility on female labor market participation at various levels of aggregation: household, cluster, regional and country level. At the aggregate level the rising employment of some women may change social norms regarding female employment and encourage other women to work, creating a social multiplier effect in labor supply. By estimating at the household, cluster, regional and national levels, we can identify both the household-level direct effect on female labor supply and this social multiplier effect. To identify the causal effect of reproductive health and behavior on female labor supply we use variation in abortion and contraceptive laws across countries and time as an instrument for fertility.