An Empirical Analysis of Life Cycle Fertility and Female Labor Supply

Abstract

This paper examines household fertility and female labor supply over the life cycle. We investigate how maternal time inputs, market expenditures on offspring, as well as the benefits they yield their parents, vary with ages of offspring, and influence female labor supply and contraceptive behavior. Our econometric framework combines a female labor supply model and a contraceptive choice index function. It also accounts for the fact that conceptions are not perfectly controllable events. Using longitudinal data on married couples from the Panel Study of Income Dynamics, we estimate these equations and test alternative specifications of the technologies governing child care. Our findings suggest that while parents cannot perfectly control conceptions, variations in child care costs do affect the life cycle spacing of births. Furthermore, our results demonstrate the gains of modeling the linkages between female labor supply and fertility behavior at the household level.