Working and caring for large families: do mothers face a trade-off?
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Working and caring for large families: do mothers face a trade-off? Anna W. Zhu
Published online: 2 November 2012 Ó Springer Science+Business Media Dordrecht 2012
Abstract Does having three or more children lower the chance that mothers participate in the labour force compared to those who have two children? Most of the previous literature on this topic describes the substantial indirect costs of children for first-time mothers, but having additional children at higher parities can entail even higher indirect costs. This paper finds a labour force participation gap between mothers who have three or more children and those who have two children. It explores whether this gap is caused by the selectivity of those who purposely choose to have large families or by family size itself. It also questions if the gap occurs simply because mothers with 3 or more children are consequently more likely to care for young children: 42 % of them have a child under the age of five compared to only 38.7 % of mothers with 2 children. A priori, it is unclear if the employment gap between these two groups of mothers is driven by the difference in the age of the youngest child or by the difference in the number of children. This paper contributes to the literature by disentangling the effect of having an additional child from having an additional young child in the household with a simple but innovative approach (grouping by mother’s age and her age at the second pregnancy) that avoids controlling for the age of the youngest child in regression. Keywords Female labour force participation Fertility Sex of the child Instrumental variables Introduction The former Australian treasurer Peter Costello once famously encouraged women to have three children, ‘one for mum, one for dad, and one for the country’. This A. W. Zhu (&) Social Policy Research Centre, UNSW, Level 2 John Goodsell Building, Sydney, NSW 2052, Australia e-mail: [email protected]
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statement also reflects the policy goal of lifting fertility rates to replacement level (Henry 2004). In order for that to happen some women must have three or more children. McDonald (2004) highlighted the continuing importance of this group in Australian demography, showing that it contributes to approximately 50 % of total fertility in Australia, unlike the situation in Europe where women are less likely to have three or more children (McDonald and Moyle 2010). However, a policy that encourages women to have three or more children can be costly for families, particularly in forgone female labour force participation. This paper explores whether progressing fertility beyond two children lowers the chance that mothers participate in the labour force compared to those who complete fertility at 2 children. Most of the previous literature on this topic describes the substantial indirect costs of children for first-time mothers (Bronars and Grogger 1994; Chapman et al. 2001). Having additional children at higher parities can entail even higher indirect costs because mothers
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