Fertility, Female Labor Supply and Public Policy

32 Pages Posted: 18 Dec 2001

See all articles by Patricia F. Apps

Patricia F. Apps

The University of Sydney Law School; IZA Institute of Labor Economics

Ray Rees

Ludwig Maximilian University of Munich - Faculty of Economics; CESifo (Center for Economic Studies and Ifo Institute)

Date Written: December 2001

Abstract

Historically, in virtually all developed economies there seems to be clear evidence of an inverse relationship between female labor supply and fertility. However, particularly in the last decade or so, the relationship across countries has been positive: for example countries like Germany, Italy and Spain with the lowest fertility rates also have the lowest female participation rates. We accept the hypothesis that the reason for this lies in the combined effects of a country's tax system and system of child support, and we have sought to clarify this theoretically, using an extended version of the Galor-Weil model. The results suggest that countries with individual rather than joint taxation, and which support families through improved availability of alternatives to domestic child care, rather than through direct child payments, are likely to have both higher female labor supply and higher fertility. These results are strengthened when we take account of the heterogeneity among households that undoubtedly exists.

Keywords: Fertility, Taxation, Labor Supply

JEL Classification: H31, H53, J13, J22

Suggested Citation

Apps, Patricia F. and Rees, Ray, Fertility, Female Labor Supply and Public Policy (December 2001). IZA Discussion Paper No. 409. Available at SSRN: https://ssrn.com/abstract=294431

Patricia F. Apps (Contact Author)

The University of Sydney Law School ( email )

Faculty of Law, New Law Building F10
The University of Sydney
Sydney, NSW 2006
Australia
+61 2 9351 0241 (Phone)
+61 2 9351 0200 (Fax)

IZA Institute of Labor Economics

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

Ray Rees

Ludwig Maximilian University of Munich - Faculty of Economics ( email )

Munich, D-80539
Germany

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

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