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Childbearing and labour force participation in South Africa: sibling composition as an identification strategy?

van der Stoep, Gabrielle (2008): Childbearing and labour force participation in South Africa: sibling composition as an identification strategy?

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Abstract

This paper uses same sex sibling composition as a strategy to identify the exogenous effects of childbearing on female labour force participation in South Africa. International studies typically find that sibling sex composition is strong instrument for childbearing, satisfying the two properties of an instrumental variable. First, it is positively correlated with childbearing because couples have a preference for a mixed or balanced sibling sex composition. Second, sex sibling composition is a random occurrence and therefore exogenous with respect to female labour force participation. In contrast to international studies, this paper provides evidence that same sex sibling composition is a poor instrument for childbearing among Africans in South Africa. Two-stage least squares estimation of the effects of childbearing on female labour force participation reveals the weak explanatory power of sibling sex composition in first-stage estimations. The result is that very large standard errors are generated on instrumental variable estimates which cannot be interpreted with any level of confidence.

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