The Family Peer Effect on Mothers' Labour Supply

57 Pages Posted: 24 May 2016

See all articles by Cheti Nicoletti

Cheti Nicoletti

University of York - Department of Economics and Related Studies

Kjell G. Salvanes

Norwegian School of Economics (NHH) - Department of Economics; IZA Institute of Labor Economics

Emma Tominey

University of York

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Date Written: April 15, 2016

Abstract

The well documented rise in female labour force participation in the last century has flattened in recent decades, but the proportion of mothers working full-time has been steadily increasing. In this paper we provide the first empirical evidence that the increase in mothers' working hours can be amplified through the effect on her labour decisions from the decisions of her family peers. Using Norwegian administrative data covering the full population of women, we study the long-run influence of the family network on mothers' labour decisions up to seven years post birth by regressing the mothers' working hours on the average working hours across her sisters and female cousins. To identify the causal peer effect, we exploit and extend the partially overlapping peer group approach by considering for each mother both her family and her neighbourhood networks, therefore assuming that a mother interacts with her neighbours and family but she does not interact meaningfully with her family's neighbours. Moreover, we provide some empirical evidence on the potential mechanisms such as the importance of information transmission versus imitation in explaining the peer effect.

Keywords: Peer effects, Family network, Sibling spillover effects, Cousins spillover effects, Instrumental variable estimation

JEL Classification: D85, C21, C26

Suggested Citation

Nicoletti, Cheti and Salvanes, Kjell G. and Tominey, Emma, The Family Peer Effect on Mothers' Labour Supply (April 15, 2016). NHH Dept. of Economics Discussion Paper No. 7/2016. Available at SSRN: https://ssrn.com/abstract=2783313 or http://dx.doi.org/10.2139/ssrn.2783313

Cheti Nicoletti

University of York - Department of Economics and Related Studies ( email )

Heslington
York, YO1 5DD
United Kingdom

Kjell G. Salvanes (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway
+47 5 595 9315 (Phone)
+47 5 595 9543 (Fax)

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Emma Tominey

University of York ( email )

Heslington
University of York
York, YO10 5DD
United Kingdom

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