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Andrea Molina Vera
Analítika, Revista de análisis estadístico, (2015), Vol. 9
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since there are strong theoretical reasons to believe that fertility and labor supply are jointly
determined. Aguero and Marks (2008) acknowledge the possibility of endogeneity for omitted
variable bias which influences fertility and labor force participation simultaneously (e.g.
ambition or talent). Thus, several studies have exploited exogenous changes in family size
to identify the causal relationship between the number of children and female labor supply.
Some examples include twins at first birth (Rosenzweig and Wolpin (1980); Bronars and
Grogger (1994)) and sex of the two first children (Angrist and Evans (1998)). Most of these
approaches show a reduced but still significant effect of children on female labor supply.
In Latin America there are few studies which address the endogeneity of fertility decisions
and provide evidence for developing countries. Among those studies are: Cruces and Galiani
(2007), Aguero and Marks (2008) and Delpiano (2012). Cruces and Galiani study the effect
of fertility on maternal labor supply in Argentina and Mexico, exploiting the source of
exogenous variability in family size introduced by Angrist and Evans, finding that the U.S.
results can be generalized both qualitatively and quantitatively to Argentina and Mexico.
Ag¨uero and Marks using a subsample of Latin American countries and introducing female
infertility as a source of variation in family size, do not find a significant relationship between
fertility and mothers’ employment. Finally, C´aceres Delpiano studies the impact of fertility
on mothers’ employment for a sample of developing countries using fertility shock (multiple
births) and founds that children have a negative impact on female employment but with
different impacts depending on the order that child of different sex are born.
All these results seem contradictory, while Cruces and Galiani (2007), and Delpiano
(2012) show that children have a negative impact on female employment, Aguero and Marks
(2008) do not find a significant impact. One reason for this is that the local result depends
on the instrument used and the compliers are different for the three researches.
The present study highlights some fundamental aspects. The first one is the definition
of women’s employment. Delpiano (2012) underlines this issue since in developing countries
labor markets have higher levels of informality and heterogeneous payment alternatives. I
contribute to the discussion by presenting the impact of fertility on the following definitions of
employment: a) overall labor participation (paid or unpaid), b) paid work (inside or outside
the home), c) work outside the home (paid or unpaid) and d) work outside the home and
paid. These definitions pretend to capture location and compensation issues. The second
aspect highlighted is the exploration of the external validity of results (Angrist (2004)).
Thus, I find that using Angrist and Evans’ instrument, the OLS and IV estimations are
significant and negative for married women in all employment definitions used (between 8-9
percentage points). However, for all women the significance of the effect on labor supply
depends on the definition of employment: there is a negative impact for “work outside the
home” and “paid work outside the home” definitions (8 percentage points). These results are
confirmed using boys and girls as instrument and using the number of children as a fertility
measure.
The paper has the following structure: Section 2 presents the identification strategy and
2