Stuck at a Crossroad: A Microeconometric Analysis of Fertility and Married Female Labor Force Supply in the Philippines

Ingco, Katrina Nicole and Pilitro, Ver Lyon Yojie (2016): Stuck at a Crossroad: A Microeconometric Analysis of Fertility and Married Female Labor Force Supply in the Philippines.

Abstract

This study investigated the link between fertility and married female labor supply of Filipino women using instrumental variable (IV) probit regression using microeconomic data from the National Demographic and Health Survey (NDHS) published in 2013 with 7,628 married women respondents. The first stage regression results showed that couple’s age has a direct relationship on fertility. On the other hand, variables such as secondary education of married female’s husband as compared to non-educated husband, household wealth of all classes relative to the poorest household, and age of female at first marriage has an inverse relationship with the number of children. Second-stage regression results showed that fertility increases the probability of a married female to look for employment. Married female’s age, higher educational attainment relative to non-educated married female, and household wealth as opposed to the household class with the least wealth have direct relationship with married female employment. Lastly, marginal effects showed that additional children will increase the likelihood of a married female to participate in the labor force by 3 percentage points. Increase in married female’s age also increases her probability of getting employed by 0.9 percent. The chances of having labor market activity is higher by 13 percentage points if a married female attains higher education as compared to a married female that has no formal education. If a married female belongs to a household belonging to the highest wealth quintile among all classes in terms of wealth, she has the greatest chance to be employed by 16 percentage points relative to a married female who is a member of a household belonging to the lowest wealth quintile.

• Item Type: MPRA Paper
• Language: English
• Keywords: Fertility, Married Female Labor Supply, Endogeneity, IV Probit
• Subjects: D - Microeconomics > D1 - Household Behavior and Family Economics > D13 - Household Production and Intrahousehold Allocation; J - Labor and Demographic Economics > J1 - Demographic Economics > J13 - Fertility ; Family Planning ; Child Care ; Children ; Youth; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J21 - Labor Force and Employment, Size, and Structure; J - Labor and Demographic Economics > J2 - Demand and Supply of Labor > J22 - Time Allocation and Labor Supply

References

Angrist, J.D., & Evans, W.N. (1998). “Children and Their Parents’ Labor Supply: Evidence from Exogenous Variation in Family Size.” The American Economic Review. Vol. 88, No. 3, pp.450-477.

Aguero, J. & Marks, M. (2008). “Motherhood and Female Labor Force Participation: Evidence from Infertility Shocks.” American Economic Review: Papers and Proceedings. Vol. 98, No. 2, pp.500-504.

Arroyo III, C. R. (1993). “Economic Approaches to Modeling Fertility Determinants: A Selective Review.”, World Bank WPS #1085. Population, Health, and Nutrition, Population and Human Resources Development, The World Bank.

Bbale, E. (2015). “Female Education Labour-Force Participation and Fertility: Evidence from Uganda.” Final Report submitted to the African Economic Research Consortium, Nairobi, Kenya.

Becker, G.S. (1960). “An Economic Analysis of Fertility.”, in: Demographic and Economic Change in Developed Countries. Princeton University Press for the National Bureau of Economic Research, New Jersey, United States, pp. 209-231.

Becker, G.S. (1965). “A Theory of Allocation of Time.” The Economic Journal. Vol. 75, No. 299, pp.493-517.

Bloom, D.E., Canning, D., Fink, G., & Finlay, J.E. (2007). “Fertility, Female Labor Force Participation, and the Demographic Dividend.” Journal of Economic Growth. Vol. 14, No. 1, pp.71-101.

Bratti, M., (2003). “Labour Force Participation and Marital Fertility of Italian Women: The Role of Education.” Journal of Population Economics. Vol. 16, No. 3, pp. 525-554.

Brusentsev, V. (2000). “A Decomposition of the Labor Market Participation of Married Women in Three Countries: Australia, Canada and United States of America.” University of Technology Sydney: Business. Retrieved on June 10, 2016 from, http://www.finance.uts.edu.au/research/wpapers/wp106.pdf.

Cahuc P. & Zylberberg, A. (2004). “Labor Economics”. Cambridge, Massachusetts U.S.A: The MIT Press.

Carrasco, R. (2001). "Binary Choice with Binary Endogenous Regressors in Panel Data: Estimating the Effect of Fertility on Female Labour Participation." American Statistical Association Journal of Business & Economic Statistics. Vol, 9. No. 4, pp. 385-394.

Caceres-Delpiano, J. (2008). “Keeping the Best for Last. Impact of Fertility on Mother’s Employment. Evidence from Developing Countries.” Working Paper No. 08-68 Economics Series Vol. 32. Departamento de Economia, Universidad Carlos III de Madrid, Getafe, Madrid, Spain.

Da Rocha, J.M. and Fuster, L. (2006). ‘‘Why are Fertility Rates and Female Employment Ratios Positively Correlated Across OECD Countries?’’ International Economic Review Vol. 47, pp. 1187-1222.

Dayıoğlu, M. & Kırdar, M.G. (2010). “Determinants of and Trends in Labor Force Participation of Women in Turkey.” State Planning Organization of the Republic of Turkey and World Bank Welfare and Social Policy Analytical Work Program, Working Paper No. 5.

Easterlin, R.A. & Crimmins, E. M. (1985). “The Fertility Revolution: A Supply-Demand Analysis.” Chicago, Illinois, U.S.A.: The University of Chicago press.

Elder, S. & Kring, S. (2016). “Labour Market Transitions of Young Women: A Gender Analysis of the ILO School-to-Work Transition Surveys.” Work4Youth Publication Series No. 30. International Labour Office, Geneva, Switzerland.

Forgha, N.G. & Mbella, M.E. (2016). “The Implication of Female Labour Force Participation on Economic Growth in Cameroon.” International Journal of Development and Economic Sustainability. European Centre for Research Training and Development, United Kingdom. Vol. 4, No. 1, pp. 34-47.

Furtado, D., & Hock, H. (2008). “Immigrant Labor, Child-Care Services, and the Work-Fertility Trade-Off in the United States.” IZA Discussion Paper No. 3506. Germany.

He, X. & Zhu, R. (2013). “Fertility and Female Labor Force Participation: Causal Evidence from Urban China. NILS Working Paper Series No. 191. National Institute of Labour Studies (NILS), Flinders University, Adelaide, Australia.

Iacovou, M. (2001) “Fertility and Female Labor Supply.” ISER Working Paper No.2001-19. The Institute of Social and Economic Research (ISER). University of Essex, Colchester, Essex, U.K.

International Labour Office (2016). “Key Indicators of the Labour Market, 9th Edition.” International Labour Office, Geneva, Switzerland. Retrieved from: http://www.ilo.org/ilostat/kilm?_afrLoop=474134532731131#!%40%40%3F_afrLoop%3D474134532731131%26_adf.ctrl-state%3D13rqm1s88f_351.

Jacobsen J.P. (1999), “Labor Force Participation.” The Quarterly Review of Economics and Finance. Elsevier, Vol. 39, No. 5, pp. 597-610.

Lam, D. & Marteleto, L. (2008). “Stages of the Demographic Transition from a Child’s Perspective: Family Size, Cohort Size, and Children’s Resources.” Population and Development Review. Vol. 34, No. 2, pp. 225-252.

Kapsos, S., Silberman, A., & Bourmpoula, E. (2014). “Why is Female Labour Force Participation Declining so Sharply in India?.” ILO Research Paper No. 10. International Labour Office, Geneva, Switzerland.

Kinoshita, Y. & Guo, F. (2015). “What Can Boost Female Labor Force Participation in Asia?” IMF Working Paper No. 15/56. International Monetary Fund, Washington D.C, U.S.A.

Kirk D. (1996). “Demographic Transition Theory.” Population Studies. Vol. 50, pp. 361-387.

Leibenstein, H. (1957). “Economic Backwardness and Economic Growth.” John Wiley, pp. 163-164.

Leibowitz, A. (1975). “Education and the Allocation of Women’s Time.” Education, Income and Human Behavior. McGraw-Hill, New York, pp. 171-198.

Lundborg, P., Plug, E., & Rasmussen, A.W. (2014). “Fertility Effects on Female Labor Supply: IV Evidence from IVF Treatments.” IZA Discussion Paper No. 8609. Germany.

Myck, M., & Reed, H. (2005). “A Review of Static and Dynamic Models of Labour Supply and Labour Market Transitions.” The Institute of Fiscal Studies. Vol. 6, No. 15, pp. 10-31.

Nguyen, T.T.H. (2009). “The Effects of Fertility on Female Labor Supply.” Working Paper, Kansas State University, Manhattan, Kansas, U.S.A.

Organisation for Economic Co-operation and Development (2016). “OECD.Stat” Paris, France. Retrieved from: https://stats.oecd.org/Index.aspx?DataSetCode=LFS_SEXAGE_I_R.

Organisation for Economic Co-operation and Development (2016). “OECD Data.” Paris, France. Retrieved from: https://data.oecd.org/pop/fertility-rates.htm.

Posel, D. and van der Stoep, G. (2008). “Co‐resident and Absent Mothers: Motherhood and Labour Force Participation in South Africa.” Durban: School of Development Studies. University of KwaZulu‐Natal, KwaZulu-Natal, South Africa.

Rasul, I. (2008). “Household Bargaining Over Fertility: Theory and Evidence from Malaysia.” Journal of Development Economics. Vol. 86, No. 2, pp. 215-241.

Ridker, R.G. (1976). “Population and Development: The Search for Selective Intervention.” Resources for the Future, Baltimore: John Hopkins University Press.

Rivers, D. & Vuong, Q.H., (1988). “Limited Information Estimators and Exogeneity Tests for Simultaneous Probit Models.” Journal of Econometrics. Vol. 39, pp.347-366.

Rosenzweig, M.R., & Wolpin, K.I. (1980). “Testing the Quantity-Quality Fertility Model: The Use of Twins as a Natural Experiment.” Econometrica. Vol. 48, No.1, pp.227-240.

Rosenzweig, M.R., & Schultz, T.P. (1985), “The Demand for and Supply of Births: Fertility and its Life Cycle Consequences.” American Economic Review. Vol. 75, No.5, pp. 992-1015.

Schultz, T.P. (1997). "Demand for Children in Low Income Countries." in Mark R. Rosenzweig and Oded Stark, eds., Handbook of Population and Family Economics. Amsterdam: North-Holland, pp. 349-430.

Solomon, B., & Kimmel, J. (2009). “Testing the Inverseness of Fertility and Labor Supply: The Case of Ethiopia.” IZA Discussion Paper No. 3949. Germany and Western Michigan University, U.S.A.

Sundstrom, M., & Stafford, F. (1991). “Female Labor Force Participation, Fertility, and Public Policy.” Stockholm Research Report in Demography. No. 63, Stockholm University.

Thompson, W.S. (1929). “Population.” American Journal of Sociology, Vol. 34, pp. 959-975.

Todaro, M.P., & Smith, S.C. (2011). “Economic Development, 11th edition.” Boston, Massachusetts, U.S.A: Addison-Wesley.

Tortarolo, D. (2014). “Female Labor Supply and Fertility. Causal Evidence for Latina America.” CEDLAS Working Paper No. 166.

Tsafack-Nanfosso, R.A., & Zamo-Akono, C.M. (2010). “Fertility, Health and Female Labour Force Participation in Urban Cameroon.” International Business Research.

Trako, I. (2015). “Fertility and Parental Labor-Force Participation: New Evidence from a Developing Country in the Balkans.” Social Science Research Network. Paris School of Economics, Paris, France.

Vera, A.M. (2015). “Impact of Fertility on Female Labor Supply.” Analitika, Revisita de Analisis Estadistico. Vol. 9 No.1, pp. 7-20.

Wagner, S. (2013). “Rusty Instruments? Revisitting the Twin Approach to Estimating the Relationship between Fertility and Maternal Labour Market Outcomes.”, mimeo.

Willis, R. (1974). “Economic Theory of Fertility Behavior.” Economics of the Family: Marriage, Children, and Human Capital. pp. 25–80. UMI.

Wolff, H., & Makino, M. (2012). “Extending Becker’s Time Allocation Theory to Model Continuous Time Blocks: Evidence from Daylight Saving Time.” IZA Discussion Paper No. 6787.

Wooldridge, J.M. (2010). “Econometric Analysis of Cross Section and Panel Data.” 2nd ed. Cambridge, MA: MIT Press.

World Bank. (2009). “Female Labor Force Participation in Turkey: Trends, Determinants and Policy Framework.” World Bank, Washington, D.C., U.S.A.

World Bank. (2016). “World Bank Development Indicators.” World Bank, Wasington D.C., U.S.A. Retrieved from: http://data.worldbank.org/indicator/SP.DYN.TFRT.IN.

Xia, L. (2010). “How Children Affect Mother’s Labor Market Outcomes: Evidenced on Pregnancy Failures.” Shanghai University of Finance and Economics.

Younger, S.D. (2006) “Labor Market Activities and Fertility.” Cornell Food and Nutrition Policy Program Working Paper No. 218, Cornell University, Ithaca, New York, U.S.A.