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This paper estimates the causal effect of having young children aged 0 to 5 years on mothers' labour force participation in rural India. In order to address the potential endogeneity in the fertility decision, I exploit Indian families' preference for having sons. I leverage exogenous variation in the gender of older children aged 6+ years as an instrumental variable for having younger children aged 0 to 5 years in the family. IV estimates show that the mothers' participation is significantly reduced by 9.9% due to the presence of young children aged 0 to 5 years in the household, with the negative effect mostly driven by mothers belonging to the highest income quartile; mothers with high education; and mothers residing in nuclear families.

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Instrumental variables (IVs) are commonly used to estimate the effects of some treatments. A valid IV should be as good as randomly assigned, it should not have a direct effect on the outcome, and it should not induce any unit to forgo treatment. This last condition, the so-called monotonicity condition, is often implausible. This paper starts by showing that actually, IVs are still valid under a weaker condition than monotonicity. It then derives conditions that are sufficient for this weaker condition to hold and whose plausibility can easily be assessed in applications. It finally reviews several applications where this weaker condition is applicable while monotonicity is not. Overall, this paper extends the applicability of the IV estimation method.
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Using data from nationally representative household surveys, we test whether Indian parents make trade-offs between the number of children and investments in education. To address the endogeneity due to the joint determination of quantity and quality of children, we instrument family size with the gender of the first child, which is plausibly random. Given a strong son preference in India, parents tend to have more children if the firstborn is a girl. Our instrumental variable results show that children from larger families have lower educational attainment and are less likely to be enrolled in school, with larger effects for rural, poorer, and low-caste families as well as for families with illiterate mothers. Electronic supplementary material The online version of this article (doi:10.1007/s13524-017-0575-1) contains supplementary material, which is available to authorized users.
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The changing nature of women’s participation in the labor force has been a critical dimension of the development process since the Industrial Revolution. However, the relationship between participation and economic progress is far from straightforward. Though cross-sectional data do indicate that there is a U-shaped relationship between female labor force participation and GDP per capita, this relationship is not robust and it is not a consistent trend at the country level. Ultimately, women’s employment is driven by a range of multifaceted factors, including education, fertility rates, social norms, and the nature of job creation. Beyond standard labor force participation rates, policymakers should be concerned with whether women can access better jobs and take advantage of new labor market opportunities that arise as a country grows and, in so doing, can contribute to the development process itself. For this reason, policies should consider both supply- and demand-side dimensions, including access to better education and training programs and access to childcare, as well as other supportive institutions and legal measures to ease the burden of domestic duties, enhance women’s safety, and encourage private sector development in industries and regions that can increase job opportunities for women in developing countries. Particular emphasis is needed on keeping young girls in school and ensuring that they receive a good quality education, beyond junior secondary level, and are able to take advantage of training opportunities. That, in turn, will increase their chances of overcoming other barriers to finding decent employment.
Technical Report
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The sex ratio denotes the male to female ratio of a population and is represented internationally as the number of males per 100 females. In India, it is denoted by the number of females per 1,000 males. The sex ratio can be expressed in various forms: sex ratio at birth, child sex ratio or juvenile sex ratio, and sex ratio of the general population. The biologically normal sex ratio at birth is 105 male births per 100 female births (952 female births per 1,000 male births) under natural circumstances, affirming a male advantage at birth. However, because females have an advantage over males in terms of mortality at most ages, under normal circumstances, the male sex ratio declines during childhood and eventually evens out at 100. The child sex ratio or juvenile sex ratio is defined as the sex ratio in a specific age group, typically 0–6 or 0–4 years, and the global norm suggests that the sex ratio at birth (105 male births per 100 female births or 952 female births per 1,000 male births) persists among children as well (United Nations Population Fund, 2013).
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A study conducted in urban Delhi through a household survey between September and November 2006 estimates a greater female workforce participation rate than recorded in the National Sample Survey. It indicates undercounting and reflects the informality that surrounds women's work. This paper seeks to explore the nature of women's workforce participation and attempts to identify key factors influencing women's decision to work, the type of work they do, the constraints they face, and the perceived benefits and costs of engaging in paid work outside the home. In doing so, issues surrounding the methodology and underestimation of women's work within the urban context are also tackled. The study also suggests the need to understand the familial and household context within which labour market decisions are made. The role of family and kinship structures to determine women's work-life choices emerge as an important area for further study.
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Research on the labor-supply consequences of childbearing is complicated by the endogeneity of fertility. This study uses parental preferences for a mixed sibling-sex composition to construct instrumental variables (IV) estimates of the effect of childbearing on labor supply. IV estimates for women are significant but smaller than ordinary least-squares estimates. The IV are also smaller for more educated women and show no impact of family size on husbands' labor supply. A comparison of estimates using sibling-sex composition and twins instruments implies that the impact of a third child disappears when the child reaches age thirteen. Copyright 1998 by American Economic Association.
Debates around abortion typically invoke religion and politics but there is no causal evidence of the impact of politician religion on abortion. Leveraging quasi-random variation in politician religion generated by close elections in India and controlling for the party affiliation of politicians, we find lower rates of sex-selective abortion in districts won by Muslim state legislators, consistent with a higher reported aversion to abortion among Muslims compared to Hindus. The competing hypothesis that this reflects weaker son preference among Muslims is undermined by stated preference data and by demonstrating that fertility and girl-biased infant mortality increase in Muslim-won districts.
Using Danish administrative data, we study the impacts of children on gender inequality in the labor market. The arrival of children creates a long-run gender gap in earnings of around 20 percent driven by hours worked, participation, and wage rates. We identify mechanisms driving these "child penalties" in terms of occupation, sector, and firm choices. We find that the fraction of gender inequality caused by child penalties has featured a dramatic increase over the last three to four decades. Finally, we show that child penalties are transmitted through generations, from parents to daughters, suggesting an influence of childhood environment on gender identity.
The historical rise in female labor force participation has flattened in recent decades, but the proportion of mothers working full time has increased. We provide the first empirical evidence that the increase in mothers' working hours is amplified through the influence of family peers. For identification, we exploit partially overlapping peer groups. Using Norwegian administrative data, we find positive and statistically significant family peer effects, but only on the intensive margin of women's labor supply. These are in part driven by concerns about time allocation from early childhood and concerns about earnings from age five.
Can financial incentives resolve the fertility-sex ratio trade-off faced by countries with persistent son preference and easy access to sex-selection technology? An Indian program, Devi Rupak, that seeks to lower fertility and the sex ratio is unable to do so. Although fertility decreases, the sex ratio at birth worsens as high son preference families are unwilling to forgo a son despite substantially higher benefits for a daughter. Thus, financial incentives may only play a limited role in the resolution of the fertility-sex ratio conflict.
Child stunting in India exceeds that in poorer regions like sub-Saharan Africa. Data on over 168,000 children show that, relative to Africa, India's height disadvantage increases sharply with birth order. We posit that India's steep birth order gradient is due to favoritism toward eldest sons, which affects parents' fertility decisions and resource allocation across children. We show that, within India, the gradient is steeper for high-son-preference regions and religions. The gradient also varies with sibling gender as predicted. A back-of-the-envelope calculation suggests that India's steeper birth order gradient can explain over one-half of the India-Africa gap in average child height.
This paper introduces a new IV strategy based on IVF (in vitro fertilization) induced fertility variation among childless women to estimate the causal effect of having children on their career. For this purpose, we use administrative data on IVF treated women in Denmark. Because observed chances of IVF success do not depend on labor market histories, IVF treatment success provides a plausible instrument for childbearing. Our IV estimates indicate that fertility effects on earnings are: (i) negative, large, and long-lasting; (ii) driven by fertility effects on hourly earnings and not so much on labor supply; and (iii) much stronger at the extensive margin than at the intensive margin.
A common approach to evaluating robustness to omitted variable bias is to observe coefficient movements after inclusion of controls. This is informative only if selection on observables is informative about selection on unobservables. Although this link is known in theory (i.e. Altonji, Elder and Taber (2005 —, —, and —, “Selection on Observed and Unobserved Variables: Assessing the Effectiveness of Catholic Schools,” Journal of Political Economy, 2005, 113 (1), 151–184.)), very few empirical papers approach this formally. I develop an extension of the theory which connects bias explicitly to coefficient stability. I show that it is necessary to take into account coefficient and R-squared movements. I develop a formal bounding argument. I show two validation exercises and discuss application to the economics literature.
After a disappointing performance between 2004-05 and 2009-10, the Indian labour market showed some improvement between 2009-10 and 2011-12. During this two-year period, around 11 million jobs were created at an annual growth rate of around 1.1% per annum. Both rural and urban India witnessed a sharp decasualisation of employment, especially of females, and a significant improvement in the creation of regular wage employment as compared to previous rounds of the National Sample Survey. There was a faster decline in the share of workers in the farm sector during this period, while manufacturing and service sectors witnessed high growth rates in employment.
Female labor force participation rates in urban India between 1987 and 2011 are surprisingly low and have stagnated since the late 1980s. Despite rising growth, fertility decline, and rising wage and education levels, married women's labor force participation hovered around 18 percent. Analysis of five large cross-sectional micro surveys shows that a combination of supply and demand effects have contributed to this stagnation. The main supply side factors are rising household incomes and husband's education as well as the falling selectivity of highly educated women. On the demand side, the sectors that draw in female workers have expanded least, so that changes in the sectoral structure of employment alone would have actually led to declining participation rates.
India has experienced steady economic growth over the last two decades alongside a persistent decline in female labor force participation. This paper explores the relationship between economic development and female labor supply using state-level data spanning 1983-1984 to 2011-2012. While several empirical studies suggest a U shaped relationship between development and female labor force participation, our results suggest that at the state level, there is no systematic U shaped relationship between level of domestic product and women’s LFPR. These results are reinforced by the dynamic panel models. The analysis also indicates that sole reliance on growth may not be adequate to increase women’s economic activity, and that the composition of growth also merits attention.
This study examines female work participation and child labour rates using occupational data from NFHS and compares this data with the 2001 Census and NSS data. Attempts are made to identify the determinants of both female work participation and child labour. It is found that the larger the size of the family, the lower is the ability of a woman to participate in economic activity. Household size is not a determining factor for the participation of children in the workforce.
Instrumental Variables (IV) methods identify internally valid causal effects for individuals whose treatment status is manipulable by the instrument at hand. Inference for other populations requires homogeneity assumptions. This paper outlines a theoretical framework that nests causal homogeneity assumptions. These ideas are illustrated using sibling-sex composition to estimate the effect of childbearing on economic and marital outcomes. The application is motivated by American welfare reform. The empirical results generally support the notion of reduced labour supply and increased poverty as a consequence of childbearing but evidence on the impact of childbearing on marital stability and welfare use is more tenuous.
The effect of son preference on fertility varies substantially by region and state. The NFHS Subject Reports is a series summarizing secondary analysis of data from the 1992-93 National Family Health Survey (NFHS) in India. The NFHS collected information from nearly 90,000 Indian women on a range of demographic and health topics. Conducted under the auspices of the Indian Ministry of Health and Family Welfare, the survey provides national and state-level estimates of fertility, infant and child mortality, family planning practice, maternal and child health, and the utilization of services available to mothers and children. IIPS conducted the survey in cooperation with consulting organizations and 18 population research centers throughout India. The East-West Center and a U.S.-based consulting firm, Macro International, provided technical assistance, and the United States Agency for International Development (USAID) provided financial support. Printed copies are available from the East-West Center Research Program, Population and Health Studies. Single copies are available free by airmail and may be reproduced for educational use.
Although estimates of the fertility-labor supply relationship abound, a full appreciation of the interpretation of such estimates has been lacking, regardless of the empirical strategy employed. This paper attempts to elucidate, within the context of a life-cycle decision-making process, the information contained in the estimated association between fertility and labor supply as calculated from "single" and "simultaneous-equations" estimation techniques. We also present a statistical methodology based upon the occurrence of twins in the first pregnancy and provide estimates, using that methodology, of the extent to which women's life-cycle labor supply decisions respond to exogenous (and, in this case, unanticipated) extra children.
Provisional estimates from the 2001 census of India, which showed unusually high sex ratios for young children, have sparked renewed concern about the growing use of sex-selective abortions to satisfy parental preferences for sons. According to the 1998-99 National Family Health Survey (NFHS-2), in recent years the sex ratio at birth in India has been abnormally high (107-121 males per 100 females) in 16 of India's 26 states. Data from NFHS-2 on abortions, sex ratios at birth, son preference, and the use of ultrasound and amniocentesis during pregnancy present compelling evidence of the extensive use of sex-selective abortions, particularly in Gujarat, Haryana, and Punjab. The authors estimate that in the late 1990s more than 100,000 sex-selective abortions of female fetuses were being performed annually in India. Recent efforts to expand and enforce government regulations against this practice may have some effect, but they are not likely to be completely successful without changes in the societal conditions that foster son preference. Copyright 2002 by The Population Council, Inc..
This chapter presents a survey on female labor supply. The chapter surveys theoretical and empirical work on the labor supply of women, with special reference to women in Western economies, primarily the United States, in modern times. The behavior of female labor supply has important implications for many other phenomena, including marriage, fertility, divorce, the distribution of family earnings and male-female wage differentials. The labor supply of women is also of interest, because of the technical questions it poses. For example, because many women do not work, corner solutions are at least potentially a very important issue in both the theoretical and empirical analysis of female labor supply, even though in other contexts (for example, studies of consumer demand) corner solutions are often ignored. The chapter presents some “stylized facts” about female labor supply, and then discusses a number of theoretical models of special interest for understanding female labor supply. After considering empirical studies of the labor supply of women, the chapter concludes with some suggestions for future research. The chapter discusses major trends and cyclical patterns in time-series data, and then examines cross-sectional phenomena.
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