labor market activities and fertility david e. sahn and stephen d. younger
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Labor Market Activities and Fertility
David E. Sahnand
Stephen D. Younger
Introduction
• In poor countries women:– have high fertility
– have high IMR/CMR
– have low education and high morbidity (as do their children)
– work• at home
• in agriculture
• in informal self-employment
• In rich countries, women:– have low fertility
– have low IMR/CMR
– have high education and low morbidity (as do their children)
– work• away from home
• formal wage jobs
Introduction
• Relations between these factors are complex, with important feedbacks, both static and dynamic
• Here, our focus is on how women's labor market activity relates to the other factors, especially fertility and investments in children
Policy Relevance
• New employment opportunities for women can reduce fertility
• Induced reductions in fertility can increase women’s employment
• Both factors can lead to a demographic transition and to poverty reduction
Fertility/Work Trade-Off
Labor Market Activity
Fertility(Child Quantity)
Fertility/Work Trade-Off• Raising children is “women’s work” in Africa (and elsewhere)
• Incompatibility of having children with work outside the home in formal wage employment
– no “joint production”– inflexible hours in formal jobs
• Other household members may ease this trade-off– extended family (grandmothers)– older daughters (child labor)
Child Quantity/Quality Trade-Off
Labor Market Activity
Fertility(Child Quantity)
Investments in Children(Child Quality)
Child “Quantity/Quality” Trade-Off• A key feature in the economic approach to demography and
development (Becker/Lewis)– substitution effects are exceptionally strong
– gross complementarity of work and investments in children
• Brings in a dynamic, intergenerational aspect– Today’s well-educated and healthy children are tomorrow’s parents– parental education and income are clearly linked to fertility, labor market
choices, and their own children’s human capital
Thinking About Causality
Labor Market Activity
Fertility(Child Quantity)
Investments in Children(Child Quality)
• Work opportunities• Growth/development• Wages
• Reproductive Health Services• Child Care Services
• Education• Incomes (ex. mother)• Norms and customs
School fees Public Health Services
Health care costs
School fees Public Health Services
Health care costs
Thinking About Causality
Labor Market Activity
Fertility(Child Quantity)
Investments in Children(Child Quality)
• Work opportunities• Growth/development• Wages
• Reproductive Health Services• Child Care Services
• Education• Incomes (ex. mother)• Norms and customs
Labor Market Opportunities• Effect of wage rates on women’s time allocation,
fertility, and investments in children– substitution effect– income effect– note interaction of education with this effect
• Effect of job opportunities– in rural Africa, opportunities for out-of-home work are
limited
– some industries prefer female employees textiles/garments cut flowers
Thinking About Causality
Labor Market Activity
Fertility(Child Quantity)
Investments in Children(Child Quality)
• Work opportunities• Growth/development• Wages
• Reproductive Health Services• Child Care Services
• Education• Incomes (ex. mother)• Norms and customs
School fees Public Health Services
Health care costs
Thinking About Causality
Labor Market Activity
Fertility(Child Quantity)
Investments in Children(Child Quality)
• Work opportunities• Growth/development• Wages
• Reproductive Health Services• Child Care Services
• Education• Incomes (ex. mother)• Norms and customs
School fees Public Health Services
Health care costs
(Shadow) Costs of Child Quality
• Fees for health services
• School fees
• For example, many African countries have recently eliminated school fees. What has been the impact on fertility, women’s labor market activity, and investment in children?
• Clean water and other public health services
Thinking About Causality
Labor Market Activity
Fertility(Child Quantity)
Investments in Children(Child Quality)
• Work opportunities• Growth/development• Wages
• Reproductive Health Services• Child Care Services
• Education• Incomes (ex. mother)• Norms and customs
School fees Public Health Services
Health care costs
Other Conditioning Factors
• Education– increases market wages (see argument above)
– may affect attitudes and norms
– but may be jointly determined if women are forward-looking
– may also be endogenous, if pregnancy ends schooling
Other Conditioning Factors
• Income from sources other than the mother
• Attitudes, norms, and customs– key part of “modernization” theory– may have powerful interactions with other
causal variables
Research Ideas – Survey Data• Use survey data to estimate the impact of wage rates
and/or labor market conditions on work, fertility, and investments in children– Lam and Anderson (2002) in South Africa
• Use survey data to estimate the impact of “fertility shocks” on labor force participation and investments in children– “twins shock” - Rozensweig and Wolpin (1980)– “unwanted births” – Lloyd, et.al. (2006)
• Many other analogous possibilities for any of the exogenous variables in the diagram
Research Ideas – Field Experiments
• Very popular in development economics these days
• Avoids the econometric problems that plague survey research
• Example: randomized delivery of community and reproductive health services in Northern Ghana – Niagia (2005)
Research ideas – Case Studies on Impact of Economic Development
• Difficult to investigate interesting questions of effect of economic development on employment, fertility and human capital
• Consider conducting case studies
Grameen Bank-style microcredit
Impact of export processing zones on fertility and female labor force participation in Mauritius - Bheenick and Shapiro (1989)
Research Ideas – Dynamics
• Intergenerational Dynamics – models so far are static – decisions for a woman
or family at one point in time
• Child Labor– may help to relax a mother’s binding time
constraint that is key to many arguments– but at the cost of another vicious circle
Concluding Thoughts and Extensions
• Very little of any of this type of research in Africa – the field looks wide open
• Vast opportunities for AERC network