The Fertility and Women's Labor Force Participation puzzle in OECD Countries: The Role of Men's Home Production

Abstract

One effect of Southern Europe's rapid fertility decline is the emergence of a positive cross-country correlation between women's labor force participation and fertility across developed countries, despite the continuing negative correlation between these factors within countries. This study uses individual-level data for several OECD countries to examine how men's participation in home production can explain the positive relationship between fertility and women's labor force participation at the cross-country level. It finds that women living in countries where men participate more in home production are better able to combine having children with market work, leading to greater participation in the labor force at relatively high fertility levels. Within each country however, women with higher relative wages continue to have lower fertility and to participate more in the labor force than lower-paid women due to the higher opportunity cost of remaining at home. This finding on men's home production can thus explain the positive cross-country correlation between female labor force participation and fertility.