European Journal of Population 10: 293-318, 1994.

© 1994 Kluwer Academic Publishers. Printed in the Netherlands.

The Impact of Children on the Labour Supply of

Married Women: Comparative Estimates from
European and US Data

Charles A. Calhoun
The Urban Institute, 2100 M Street, NW, Washington, DC 20037, USA

Received 15 November 1993; accepted 8 August 1994

Calhoun, C.A., 1994. The impact of children on the labour supply of married women: Comparative
estimates from European and US data. European Journal of Population / Revue Europ6enne de
D6mographie, 10: 293-318.

Abstract. This paper presents estimates of the impact of the age pattern and level of fertility on the
probability of labour force participation by married and cohabiting women in twelve Eastern and Western
European countries and the United States. Logit models for labour force participation probabilities
are estimated conditional on age, age at marriage or union, educational attainment, current parity, and
number of years in parity, using data on married and cohabiting women from the United Nations
Economic Commission for Europe (UNECE) Comparative Study of World Fertility Surveys. The
estimated models are used to simulate the age profiles of labour force participation conditional on the
level and timing of fertility. The simulation results are presented in a series of charts grouped according
to similarities in the effects of fertility on the age profiles of labour force participation. Four distinct
patterns are identified that depend on the empirical significance of distinct number-of-children and
age-of-youngest-child effects. The role of family policies and the extent to which the labour supply
reductions associated with childbearing can be interpreted as opportunity costs are considered.

Calhoun, C.A., 1994. L'influence des enfants sur l'offre d'emploi des femmes mari6es: Estimations
comparatives h l'aide de donn6es d'Europe et des Etats-Unis. European Journal of Population / Revue
Europ6enne de D6mographie, 10: 293-318.

R(~sum6. Cet article pr6sente des estimations de l'effet de la f6condit6 par age et de son intensit6 sur
la probabilit6 que~ les femmes mari6es ou cohabitantes participent h la population active de douze
pays d'Europe de l'Est ou de l'Ouest et des Etats-Unis, Des modBles "logit" estiment ces probabilit6s
en fonction de l'~ge, de l'age au mariage ou ~ l'union, du niveau d'6tudes, du rang du dernier enfant
n6 et de la dur6e 6coul6e depuis sa naissance. On utilise ici des donn6es sur les femmes mari6es ou
cohabitantes, issues de l'Enqu~te mondiale sur la f6condit6 de la Commission Economique pour l'Europe
des Nations Unies. Les modules estim6s permettent alors de simuler les profils par ftge de la
participation ~ l'emploi conditionn6s par l'intensit6 et le calendrier de la f6condit6. Les r6sultats de
ces simulations sont alors pr6sent6s dans une s6rie de graphiques regroup6s selon les similarit6s dans
les comportements. Quatre types distincts sont identifi6s selon les effets du hombre d'enfants et de
l'~ge du plus jeune d'entre eux. On consid~re 6galement ici le r61e des politiques familiales et on montre
dans quelle mesure les r6ductions d'offres d'emploi associ6es aux naissances d'enfants peuvent ~tre
interpr6t6es comme des coots d'opportunit6.
294 CHARLES A. CALHOUN

1. Introduction

This paper presents estimates of the impact of the age pattern and level of
fertility on the probability of labour force participation by married and cohab-
iting women in twelve Eastern and Western European countries and the
United States. The labour supply response to fertility is an important input
into the calculation of the foregone market earnings of women associated
with the bearing and rearing of children. Previous estimates of foregone
earnings, or 'opportunity expenditures', vary widely across countries,
reflecting differences in data sources and statistical methods (see e.g. Kravdal
(1992), Joshi (1990), Davies and Joshi (1990), Beggs and Chapman (1988),
and Calhoun and Espenshade (1988)). The present paper uses a standard-
recode data set to develop comparative estimates of the participation
component of opportunity expenditures within a common statistical frame-
work.
As in previous studies, the empirical analysis of female labour supply is
motivated by the standard theory of household production and human capital
investment. However, data limitations and the desire to develop compara-
tive estimates for several countries have precluded the estimation of human
capital earnings functions. For those interested in estimates of foregone
earnings, the labour force participation probability estimates are reported
in such a way as to facilitate the calculation of opportunity expenditures from
independent estimates of hourly earnings.1
The following two sections briefly describe the data and statistical methods
that were used in the present study. This is followed by presentation of the
empirical results. The estimated models were used to simulate the age profile
of labour force participation conditional on the level and timing of fertility.
The simulation results are presented in a series of charts that have been
grouped according to similarities in the effects of fertility on the age profiles
of labour force participation. We briefly discuss the relationship of the
estimated fertility-employmentprofiles to national policies that directly influ-
ence female labour force attachment and the opportunity costs of children.
The final section of the paper presents a brief summary and conclusion.

Foregone earnings are computed by combining estimates of differential participation in paid employ-
ment by women with and without children with wage-rate estimates based on a human-capital earnings
model. As such, foregone earnings may be a biased measure of the true opportunity costs of children
because they ignore the potentially greater value of time spent in other non-market household production
and leisure activities that compete with motherhood. This has led to the interpretation of foregone
earnings as the 'cash' opportunity costs or opportunity expenditures on children.
THE IMPACT OF CHILDREN ON THE LABOUR SUPPLY OF MARRIED WOMEN 295

2. Data

The data are from a standard-recode analysis file created as part of the United
Nations Economic Commission for Europe (UNECE) Comparative Study
of World Fertility Surveys. The sample design and questionnaires are
summarized in Berent, Jones and Siddiqui (1982). The countries repre-
sented in the data are the Western European countries of Belgium, France,
Great Britain, Italy, the Netherlands, and Spain; the Nordic countries of
Denmark, Finland, and Norway; the Eastern European countries of
Czechoslovakia, Hungary, and Poland; and the United States. The names
of the countries used in this report are those in effect at the time the original
data were collected. The data in the UNECE comparative analysis file were
limited to married and cohabiting women between the ages of 15 and 45, and
originated in national surveys carried out between April 1975 and December
1979. 2
The standard-recode format of the UNECE data greatly facilitates their
use in cross-national comparisons; however, relatively few published studies
have utilized the comparative analysis file. 3 Those studies which do exist
have been concerned primarily with the analysis of fertility behaviour, and
the data have yet to be exploited for a comparative analysis of women's
employment. While more recent survey and micro-census data are available
for most of the countries examined in this paper, these typically do not
provide the same level of detail as the national fertility surveys from which
the UNECE data were compiled, and they do not presently exist as a compara-
tive analysis file encompassing Eastern and Western European populations. 4

3. Statistical methods

As in nearly all studies of this type, an indicator of labour force participa-

tion was related to variables measuring the level and age pattem of fertility.

2 The original sampling frame for the Netherlands differed from that used in the other countries.
While nearly all the other countries used a self-weighting representative sampling scheme, the Dutch
sample was selected from all women married between 1963 and 1973, regardless of age.
3 For additional reports in the series Comparative Studies: ECE Analyses of WFS Surveys in Europe
and USA, see Berent (1982, 1983), Jones (1982) and Ford (1984). More recent studies that have used
the UNECE comparative analysis file include analyses of the distributional aspects of human fertility
by Lutz (1989) and desired and excess fertility by Calhoun (1991).
4 Since the research reported in the present paper was undertaken more recent cross-national data
have become available. See Commission of the European Community (1991).
296 CHARLES A. CALHOUN

Separate statistical models were estimated for each country and then used
to predict the probability of labour force participation at each age between
20 and 45 years, conditional on the values of the explanatory variables.
The predicted age profiles for childless women were compared to those for
women bearing one, two, or three children to assess the impact of fertility
on participation in market work.
Individual level data for each country were used to estimate a multi-
nomial-logit probability model for a woman's employment status at the
date of the survey. Alternative specifications, including binary and ordered-
probit models, were also estimated. The results did not vary significantly
with changes in the functional form used for the employment probability
model. For nine countries (Belgium, Denmark, Finland, Great Britain, Italy,
Netherlands, Norway, Spain, United States) employment status was measured
by a categorical variable taking the value 0 if the woman was non-employed,
1 if she worked part time, and 2 if she worked full time. For the four
remaining countries (Czechoslovakia, France, Hungary, Poland) employment
status was measured by a dummy variable taking the value 1 if a woman
was working, and 0 otherwise. The statistical analysis was limited to women
with three or fewer children, corresponding to those fertility levels for
which the number of years in parity (age of the youngest child) could be
determined.
One advantage of using the multinomial-logit model is that the differen-
tial effects of the explanatory variables on the relative odds of participation
versus non-participation in market work can be estimated jointly with the
distribution of employment between part-time and full-time work. This is
particularly relevant for the analysis of the impact of childbearing on a
mother's labour supply if women respond to pregnancy and childbirth by
shifting from full-time to part-time employment. Indeed, for the nine coun-
tries in which separate participation levels were measured, significant
differences were found in the extent to which part-time employment was
substituted for full-time work following the birth of a child.
In order to maximize the comparability of the results across countries
and to minimize the incidence of missing data, the number of explanatory
variables was limited to a few key covariates. These included indicators of
current and previous childbearing experience, linear and squared terms for
the respondent's age and age at marriage or union, and a set of dummy
variables for the respondent's educational attainment. The level of fertility
was measured by dummy variables for parities 0, 1, 2, and 3, with 0-parity
as the omitted category. The timing of fertility was measured by a dummy
THE I M P A C T OF CHILDREN ON THE L A B O U R S U P P L Y OF M A R R I E D W O M E N 297

variable for whether the woman was currently pregnant and linear and
squared terms for the number of years in parity (derived by interacting the
age of the youngest child with the dummy variable for current parity). 5
The cross-sectional estimates of the impact of children on the labour
force participation probabilities of married women are subject to all the usual
caveats. The possibility of joint or reverse causality between fertility and
employment could result in biased estimates of conditional labour force
participation probabilities. Although the dependent variable, current employ-
ment status, will not be a direct cause of previous births, it is possible that
the current activities of women who have been continuously employed over
a number of years reflect earlier 'joint' decisions about both labour force
participation and fertility. On the other hand, even if labour force partici-
pation and fertility are joint decisions, there may be situations in which
empirical estimates of conditional employment probabilities are needed.
For example, proposals to make the earnings foregone by women within
marriage a component of property settlements following marital separation
require empirical estimates of opportunity expenditures (Funder, 1987).
The more relevant question in the present case is whether previous births
have a direct causal impact on current employment status, or whether we
are simply observing correlations arising from individual-specific fixed
effects that are correlated with employment in the cross-section sample;
for example, if those women who have a 'taste' for motherhood also have
a preference for non-employment (see Ermisch, 1991). Evidence of a true
causal effect of fertility on employment status has been found in research
based on longitudinal data for the United States (Calhoun and Espenshade,
1988). In the present case, we would argue that it is unlikely that we are
observing simple correlations if the estimated impact of a birth on current
employment status varies with the length of time since the birth, as is the
case for many of the countries in the UNECE comparative analysis sample.
Pregnancy status is used in the present study as an additional explana-
tory variable measuring the timing of fertility. In this case, reverse causality
could occur if previous and current attachment to the labour force is directly
related to whether or not a woman is pregnant at the time of the survey.
The notion that current employment status is a direct determinant of current
childbearing activity has been advanced as an explanation for the appearance

5 Information on current pregnancy status and the age of the w o m a n at the time of the third birth
were not available for Great Britain. The n u m b e r of years in parity for parity-three w o m e n in Great
Britain was a s s u m e d to be equal to one-half the n u m b e r of years since the second birth.
298 CHARLES A. CALHOUN

of counter-cyclical fertility at the aggregate level in the United States (Butz

and Ward, 1979).
Finally, changes in the fertility-employment relationship across successive
birth cohorts of women in the cross-section samples might be misinter-
preted as the effects of life-cycle variation in the explanatory variables.
Between 1960 and 1980 women's labour force participation increased in most
of the industrialized countries, and the primary source of this growth was
the participation of married women (Mincer, 1985). We are able to control
for differences among marriage cohorts by including both the age of the
respondent and her age at marriage or union as explanatory variables. While
this will control for the effect of duration of marriage on the fertility-employ-
ment relationship, it cannot fully capture the effect of secular trends in
participation rates across all ages and marriage durations.
In light of these potential limitations, the simulated 'life-cycle' age-
employment profiles presented below are best thought of as representing
the experience of synthetic cohorts, where we have attempted to 'synthe-
size' the cohorts in a comparable manner for each country. These are
unavoidable limits imposed by the use of cross-sectional data. The impact
of childbearing on married women's employment has received consider-
able attention in recent years, and most studies in this area have been subject
to similar limitations. The comparative results for Europe and the United
States presented here should be considered in that context.

4. Empirical results

Multinomial-logit estimates are reported in Tables 1 and 2. Two sets of

coefficient estimates are reported for those countries that provided indicators
of both part-time and full-time participation, while a single set of estimates
is given for those countries that only had information on total participation
rates. For the nine countries with information on both part-time and full-time
participation, the arithmetic signs of the coefficient estimates indicate the
qualitative effects of the explanatory variables on the probability of working
part-time or full-time relative to the probability of being non-employed.
For the four countries with information only on total participation rates,
the coefficient estimates indicate the effect of the explanatory variables on
the odds of participation versus non-participation.
All of the countries show negative and statistically significant effects of
previous births on labour supply, although the relative magnitudes of the
THE IMPACT OF CHILDREN ON THE LABOUR SUPPLY OF MARRIED WOMEN 299

effects exhibit a great deal of variation across countries and with the number
of years in parity. A more detailed assessment of these effects will be
provided in the following section. Being pregnant had a negative and
statistically significant effect on full-time participation in every country
that distinguished full-time from part-time work except Belgium. Pregnancy
also had a negative effect on part-time participation in Belgium, Denmark,
Italy, and the Netherlands. Pregnancy had no effect on the overall probability
of participation in the Eastern European countries of Czechoslovakia,
Hungary, and Poland. This variable was not available for Great Britain, but
a recent study by Joshi also found a negative effect of pregnancy on the
probabilities of part-time and full-time employment by British women (Joshi,
1990).
The finding that pregnancy has no effect on overall participation rates
for Czechoslovakia, Hungary, and Poland could simply be a result of the
fact that it was not possible to differentiate between part-time and full-time
participation using the UNECE data for these countries. If pregnant women
shift from full-time to part-time work it is possible that no decrease in overall
participation rates will be observed. Czechoslovakia and Poland are among
those countries in which family policies were developed with the specific
intent of maintaining the labour force participation levels of women with
children. This is consistent with the finding that labour force participation
rates in these countries are high and the impact of children is relatively
small and of limited duration. In contrast to the Eastern European coun-
tries, being pregnant is still estimated to have a strong negative effect on
overall participation in France, even though part-time and full-time partic-
ipation could not be differentiated.
Educational attainment had a statistically significant positive effect on
labour supply in nearly every country. For most countries the effect can be
attributed to the increased participation of women in the highest (post-
secondary) educational attainment category. Finland appears to be an
exception to this pattem. In Finland the estimated relationship is highly
nonlinear, with lower probabilities of part-time and full-time participation
for women with relatively low or relatively high educational attainment.
The parameter estimates reported in Tables 1 and 2 can be combined
with independent estimates of age-specific earnings to develop estimates
of the cash opportunity costs of children. Because information on previous
labour force experience was not available for many of the countries in the
UNECE comparative analysis file, estimates of human capital earnings func-
tions and foregone earnings are not reported here. Instead, the focus in the
300 CHARLES A. CALHOUN

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present paper is on the participation component of foregone earnings. In

the following section the estimated logit functions are used to simulate the
age profiles of labour force participation probabilities conditional on the
childbearing experience of the respondent.

5. Simulated age-profiles of labour force participation

To compare the net impacts of the level and timing of fertility on labour
supply among the countries in the UNECE comparative analysis sample,
the estimated models were used to simulate age profiles of labour force
participation probabilities. For each country the estimated logit model was
used to predict the probability of employment and non-employment condi-
tional on the age of the woman and the values of the other explanatory
variables. This process was repeated assuming that the woman either
remained childless or bore a total of one, two, or three children over her
lifetime. As age varies from 20 to 45 years in the simulation, the values of
the variables measuring pregnancy, parity, and the number of years in parity
(age of the youngest child interacted with the dummy for current parity) were
updated and used to compute new values for the probabilities of participa-
tion and non-participation.
The specific assumptions underlying the simulations were as follows:
(1) births occur at ages 25, 28, and 31; (2) pregnancy occurs in the one-
year age interval prior to the year in which a birth occurs; (3) all marriages
and consensual unions begin at age 20 and remain intact through the end
of the simulation at age 45; and (4) the distribution of educational attainment
matches that of the sample for each country. 6 The results of the simula-
tions are reported in Figs. 1 to 4, where the countries have been grouped
according to similarities in the simulated profiles. Figures 1 to 4 report the
overall probabilities of participation, and, where possible, the decomposi-
tion of the overall level into part-time and full-time rates.
Four distinct patterns emerge. The first pattern, illustrated by Fig. 1, shows
children having roughly proportional impacts on the overall probability of
participation, but with eventual recovery to the participation levels of

6 For the simulations the dummy variables for each educational status category were replaced with
the corresponding percentage from the sample used for estimation. This approach was taken primarily
for convenience. An alternative approach would be to derive separate profiles by educational attain-
ment category, and then use the sample distribution to compute a weighted average profile.
THE IMPACT OF CHILDREN ON THE LABOUR SUPPLY OF MARRIED WOMEN 305

childless women by age 45. The countries in this group include Denmark,
Finland, Norway, and the United States. The impact of a first birth tends
to be slightly larger than that predicted for subsequent births, and there is
a shift from full-time to part-time employment as the result of pregnancy and
childbirth. Part-time participation eventually declines, both in absolute terms
and as a share of total participation. Parity-one women in Norway appear
to be an exception, as part-time employment increases up to age 45 and
full-time participation falls off quite rapidly. The shift to part-time work
among the countries in Fig. 1 is most pronounced for Norway, while the
estimated impact of pregnancy and childbirth on part-time participation for
US women is less than for the other countries in this group.
Figure 2 illustrates the second pattern, which also shows a proportional
impact of births on the overall probability of participation, but with less
than complete recovery to the levels of participation for childless women.
The group of countries with this pattern includes Belgium, Italy, France,
and Spain. The results in Fig. 2 imply that married women in these coun-
tries experience permanent reductions in labour supply as a result of bearing
children. For Belgium and Italy, the impact of pregnancy on the probability
of part-time participation is quite pronounced, while the continuing presence
of children appears to have little effect on the total proportion of women
working part time. As overall participation rates eventually fall with age,
part-time participation represents an increasing share of total labour supply.
While this is consistent with women shifting from full-time to part-time
employment following childbirth, the same pattern appears to hold for
childless women. Recovery of full-time participation to the levels of child-
less women appears to be complete for parity-one women in Italy and Spain,
but unlike the countries in Fig. 1, all four countries in Fig. 2 show substantial
and permanent reductions in employment for women having two and three
births. Note that the impact of a third birth is larger for France than any of
the other countries in the UNECE comparative analysis sample.
The third pattern, shown in Fig. 3, includes those countries for which
the impact of a first birth is very large, but where the recovery of overall
employment probabilities is more or less complete by age 45. This group
includes Great Britain, the Netherlands, and Hungary. The results for Great
Britain are similar to those reported by Joshi (1990). Although the impact
of a first birth is quite substantial, in all three countries the recovery of overall
participation rates is complete, with a much larger share eventually allo-
cated to part-time employment in Great Britain and the Netherlands. Overall
participation for women with children is actually higher than that of child-
306 CHARLES A. CALHOUN

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less women in Great Britain and the Netherlands after age 35 or 40. In the
Netherlands this is almost entirely the result of high levels of part-time
participation by parity-three women. Full-time participation by parity-three
women in the Netherlands is predicted to fall to zero, while part-time par-
ticipation rises to around 80 percent. Overall participation declines to a
greater extent with increasing age in the Netherlands than in any of the
other countries analyzed. A similar finding was reported by Hartog and
Theeuwes (1985) in their analysis of Dutch women's labour supply. Hungary,
which also has a large first child effect, is the only one of the three Eastern
European countries for which the relationship between employment and
fertility appears to conform to what one might call a 'Western' pattern.
Unfortunately, it was not possible to decompose the age profile for Hungary
into full-time and part-time participation.
Figure 4 shows the simulated participation profiles for the final group, and
includes the Eastern European countries of Czechoslovakia and Poland. These
countries are distinguished by the relatively negligible effect that children
appear to have on the probabilities of labour force participation. Overall
participation is very high, and even the cumulative effect of three births
does not reduce the rate of participation by more than 25 percent.
Furthermore, the recovery of labour force participation following a birth is
rapid and nearly complete in both countries.

6. Fertility, employment and family policies

To what extent is variation in the impact of fertility on married women's

labour supply related to differences in family policies among the countries
in the UNECE comparative analysis sample? The ILO (1989) has classi-
fied national family polices according to whether a country has: (a) an
explicit, comprehensive family policy, as in Czechoslovakia, France,
Hungary, Norway, and Sweden; (b) an explicit but narrowly focused family
policy, as in Austria, Denmark, Finland, the Federal Republic of Germany,
and Poland; or, (c) the absence of any explicit family policy, as in the
United Kingdom, the United States, and Canada. The ILO report also iden-
tified four main objectives of family policies, any of which may coexist
within a given country: (1) family policy as population policy; (2) policies
to protect children from poverty; (3) policies designed toward neutrality
and freedom of choice; and (4) policies to enhance gender roles and the
perceived interests of the labour market.
THE IMPACT OF CHILDREN ON THE LABOUR SUPPLY OF MARRIED WOMEN 313

Given the observed mixture of family policies and possible combina-

tions of policy goals, it would be surprising if any broad classification of
countries could yield insight into the fertility-employment patterns identified
in Figs. 1 to 4. However, among the countries in the UNECE comparative
analysis file, it would appear that the Eastern European countries of
Czechoslovakia and Poland did succeed in attaining high levels of labour
force participation and strong attachment to the work force among married
women with children. This is consistent with the observations of the ILO
regarding the role of family policies in Eastern Europe:
'The goal of drawing women into the labour market is most commonly
stated in Eastern European countries. Indeed, the Constitutions of many of
these countries guarantee the employment of women and make the organi-
sation of family policies to facilitate it a priority. In socialist countries state
policies are usually based on constitutional guarantees for the employment
of women, with priority for working mothers, and on a general employ-
ment policy, intended to prevent unemployment.' (ILO, 1989, p. 45, italics
added)
Although one cannot ignore important social, political, and economic
differences between east and west, it is clear that the relationship between
fertility and employment in these countries was substantially different from
that found for the countries in Western Europe and the United States, and
that public policies were enunciated with the stated purpose of achieving such
an outcome. 7
While the results for Czechoslovakia and Poland suggest the existence
of low opportunity expenditures on children that follow directly from the
provision of family allowances and a diminished labour supply response to
fertility, it would not be correct to infer that women who exhibit relatively
large labour supply reductions in response to childbearing have high oppor-
tunity costs. For example, even though Sweden is not one of the countries
in the UNECE comparative analysis sample, it provides an illustration of
how specific family policies can drive a wedge between the labour supply
reductions associated with fertility and the true opportunity cost of children.

7 The ILO study also reports that family allowances as a percentage of average renumeration in 1980
were substantially higher for Czechoslovakia and Poland than for all other countries in the UNECE
sample, with the exception of Hungary (ILO, 1989, Table 8, p. 55). We have already noted that the
response of Hungarian women's employment to fertility appears to follow the pattern of some Western
European countries. This may reflect the relatively greater opportunities that existed in Hungary for
earning money in second and third jobs in the private sector, which could have reduced the impact of
family allowances oriented toward maintaining primary employment.
314 CHARLES A. CALHOUN

Swedish family leave and child care policies, developed ostensibly to promote
the labour force opportunities of women and men irrespective of their
household circumstances, have had the effect of reducing the 'cash' oppor-
tunity costs of children to nearly zero (Hoem, 1990; Sundstr6m and Stafford,
1992). However, in contrast to the Eastern European goal of maintaining
the participation levels of working mothers, the maximum financial benefits
of the Swedish family leave policy are realized only if the mother or father
withdraws from the labour force, in some cases for up to five years. Thus,
the labour supply response to childbearing in Sweden would not be indica-
tive of the true cash opportunity costs of children, given the high levels of
compensation provided by the state. 8
To further illustrate this point: among the countries in the UNECE com-
parative analysis sample, Norway and the United States are found to have
similar conditional (on fertility) profiles of labour force participation, despite
the fact that they lie at opposite ends of the family-policy spectrum and
presumably have much different welfare impacts associated with opportunity
expenditures on children. The same is true of Great Britain and Hungary.
Czechoslovakia and Hungary both have comprehensive family policies, but
the estimated relationship between fertility and employment is strong in
Hungary and weak in Czechoslovakia. All of which suggest the difficulty
of reaching any firm conclusions about the relative welfare implications of
labour supply reductions associated with childbearing across countries, and
point to the need for a structural model of the joint response of fertility
and labour force participation to family policies. While the development
of such a structural framework is beyond the scope of the present paper,
one can anticipate that the changes occurring in the newly independent states
of Eastern Europe could eventually provide the data needed to pursue these
and related research questions.

7. Summary and conclusion

This paper has presented cross-national estimates of the impact of the level
and timing of fertility on married women's employment for several Eastern
and Western European countries and the United States. The empirical results

8 In fact, Sweden provides an example of where the pro-natalist effects of their family leave policy
could actually reverse the causal relationship between fertility and labor supply, and where the bearing
of children might have a positive impact on the family budget.
THE IMPACT OF CHILDREN ON THE LABOUR SUPPLY OF MARRIED WOMEN 315

are consistent with the findings of previous research that has analyzed data
from many of same countries. In particular, the estimated models confirm
the existence of distinct 'number-of-children' and 'age-of-youngest child'
effects such as those identified in previous research (reviewed, for example,
by Joshi, 1990). While other studies have tended to use the number of
children in particular age groups (e.g., 0-5, 6-11, 12-15 years), we have
separated the number and age-of-children variables to estimate the proba-
bility of participation conditional on the age of the youngest child at each
parity. The relative importance of the two effects helps to determine whether
childbearing results in temporary or permanent reductions in the labour force
participation of mothers, as well as the post-childbearing distribution of
employment between part-time and full-time work.
Countries in which both number-of-children and age-of-youngest child
effects are present, but neither effect seems to dominate (Denmark, Finland,
Norway, United States), showed more or less proportional impacts of
successive births and full recovery of employment to the levels of child-
less women. Countries in which the age of the youngest child is only weakly
related to the probability of employment (Belgium, Italy, France, Spain) were
those in which women exhibited permanent reductions in participation rates
that were roughly proportional to the number of births. Countries in which
there was a large first-child effect, but rapid recovery of total participation
(Great Britain, Netherlands), were also those in which there was the most
pronounced shift toward part-time employment as participation levels
recovered.9 Finally, the Eastern European countries (Czechoslovakia, Poland)
were distinct from the other countries in terms of their higher overall levels
of participation and relatively small number-of-children and age-of-children
effects.
Econometric estimates of female labour supply functions were presented
that can be combined with independent estimates of age-specific earnings
to estimate foregone earnings. However, the estimated impact of children
on married women's labour force participation does not always constitute
evidence of significant opportunity costs because of differences in family
policies that compensate parents for foregone earnings. By the same token,
a reduced response of employment to fertility could be the result of policies
aimed at maintaining the labour force participation of mothers.

9 In a survey of labour force trends since 1960, Mincer (1985) identified the switch from part-period
to part-time (short hours) employment, along with a general decline in fertility, as the means by which
women attained greater continuity of market employment.
316 CHARLES A. CALHOUN

The labour supply response depends on the form of state provided

incentives to promote participation. The example was given of Sweden, which
has policies that aim to increase the initial and lifetime labour force par-
ticipation of parents by compensating them for foregone earnings during a
period of non-participation associated with childbearing. By contrast, some
Eastern European countries developed incentives to maintain high levels
of participation by mothers with young children. In both cases the labour
force reductions associated with fertility are a poor proxy for opportunity
costs.
For countries in which the state plays a relatively small role in influencing
childbearing and labour force entry and exit, such as the United States, the
estimated labour supply function will correspond more closely to the
theoretical notion of opportunity costs. While the same is generally true of
Great Britain, a significant component of the foregone earnings of British
women is the result of a shift from full-time to part-time work.
The international comparisons of the impact of children on married
women's labour supply are based on a standard-recode data set and are
estimated within a common statistical framework. The statistical model is
limited, however, by the reliance on cross-sectional data, which fails to
fully capture the dynamics of individual fertility and labour force transitions.
Future work should aim to exploit longitudinal and retrospective data to
control for the contemporaneous and lifetime impact of state and market
incentives on transitions to and from the labour force and the timing of
childbearing. As the research reported here demonstrates, ascertaining the
true opportunity costs of children will require a structural model of fer-
tility, household production, labour supply, and public policies that affect
the family.

Acknowledgements
This paper is based in part on work conducted while the author was Research
Scholar in the Population Program of the International Institute for Applied
Systems Analysis, Laxenburg, Austria. A previous version of this paper
was presented at the Fourth Annual Meeting of the European Society for
Population Economics, Marmara University, Istanbul, Turkey, June 7-9,
1990. The author would like to thank Heather Joshi and Robert Wright for
their comments on the previous version. Financial support was provided
THE IMPACT OF CHILDREN ON THE LABOUR SUPPLY OF MARRIED WOMEN 317

by IIASA and The Urban Institute. The views expressed are those of the
author and do not represent the opinions of IIASA, The Urban Institute, or
their sponsors.

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