An Empirical Analysis of Life Cycle Fertility and Female Labor Supply

Abstract

This paper examines US household fertility and female labor supply over the life cycle using data from the Panel Study of Income Dynamics. The authors investigate how maternal time inputs and 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. The 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 the authors estimate these equations and test alternative specifications of the technologies governing child care. The findings suggest that while parents cannot perfectly control conceptions variations in child care costs do affect life cycle spacing of births. Furthermore the results demonstrate the gains of modeling the linkages between female labor supply and fertility behavior at the household level. (authors modified)