Fertility 生育

Political Economy of Welfare and Gender Inequal-

ity (PEWGI), 2024-2
Graduate Institute of National Development, NTU
Instructor: Dr. Ijin Hong
Do employed women have more children?
Or the opposite? 就業女性是否有更多孩子？或者相反？
Index
• Fertility in a PE perspective
• The reversal of the relationship between female LM participa-
tion and fertility
• Women and the LM
• The impact of family policies 家庭政策 on fertility in indus-
trialised countries
• A review of empirical evidence
• Thinking exercise
Fertility
• As women have moved into the
paid workforce over the 19 century,
fertility rates 生育率 have plummeted
• Average OECD fertility dropped from
2.4 children per women (1970) to less
than 1.7 (2000).
• Female labour force participation rate
rose from 45% to 65%+
• A ‘giant X’ figure
• A fact of the modern world, reflect-
ing women’s opportunity costs 機會成本 ,
the decline of the gender division
of labour 性別分工 with stronger bar-
gaining power 議價能力 of women?
The reversal of the relationship between
female labor force participation and fertility
Policy effects?
• Childcare spending 托兒服務支出 has less
bearing on fertility levels than ex-
pected (r=.13).
• This depends on labour market struc-
tures:
In countries with highly flexible LMs,
affordable day care services are avail-
able in the market, and women can rela-
tively easily find jobs (US, NZ)
For LMs with specific investments in
human capital, limited effect.
• AT, DE, IT have traditionally had generous
subsidies for families with children with low
fertility rates – women more likely to take
time off work for care reasons, also due to
the fact they are more costly to their em-
ployers
Two macro-level variables
• Publicly provided day • Because of employers’ statisti-
care helps reduce the cal discrimination, women shift
problem because it short- their career investment to-
wards (more general skills)
ens career interruptions occupations with high job flex-
and gives women more ibility
flexibility in balancing •  when jobs are in short supply,
work and career the desire of women to have ac-
tive careers forces them to have
fewer children
• The state needs to subsidize
jobs that are highly flexible in
terms of hours and careers inter-
ruptions
Women and the LM
• 1. Demand for female labour
• Firms get lower returns on human capital investment in service
sector jobs, which are less about labor productivity.
• Difference between general skills vs. specific skills
• In Liberal Market Economies (LME) 自由市場經濟 , deindustrialization
happened relatively quickly, and LMs are relatively unprotected. Firms
delocalize to relocate manufacturing operations overseas in pursuit of
cheaper labor. Deregulated LMs allow wages and prices to drop quickly.
• In Coordinated Market Economies (CME) 協調的市場經濟 , long-term, spe-
cific investments in human capital, and neocorporatist wage-setting
systems allow manufacturing to retain a larger share of the overall pri-
vate sector economy, and personal and social service expansion has
been slower (Iversen, 2005)
• LMEs cluster 聚類 at
one end (smaller cir-
cle), exhibiting low
price levels and a
high share of RWHR
employment.
• The opposite patters
are observed for
CMEs (larger circle)
• 2. Divorce risk
• Compared to a 14.6% divorce rate in OECD countries in
1970, nearly one in two marriages ended in divorce in 2005.
• Unable to rely on marriage as an insurance against poverty, more
women in high-divorce societies will “self-insure” by earning an in-
come on their own
• Divorce and female labor force participation: 0.9 correlation!
• As the outside options of women improve, the bargaining space in-
side of the marriage shrinks, so the exit option from unhappy mar-
riages becomes viable
• 3. Demonstration effects
• Why women try so hard to enter the workforce in countries
where the demand for female labor is low and where divorce
is relatively hard and rare?
• In IRE, IT, JP, POR, ESP, KR women seem to be responding to hostile
LMs not by giving up on career prospects and settling for a traditional
motherhood role, but by trying even harder at the expense of child-
birth  lower fertility
• Influenced by the opportunities they observe women having
in other countries?
• Fertility among developed nations might be positively related
to ease of employment and career advancement for women.
Findings
- Occupation or sector of employment
makes little difference for men, whereas
for women if is quite important
Among 1,000 women in the public sector
公共部門 , an estimated 70 more children than
among 1,000 women in the private sector
is expected (ceteris paribus)

- For men, a negative effect of public

sector employment is expected on their
number of children (though it is not
significant)

(Using fertility among senior managers as

the reference group, the other black bars
show estimated fertility rates among
women in different occupations relative to
men in those occupations)
LMs and fertility in US, JP, DE, SWE

• Lower fertility rates for specific-skills economies?

• Results of the multi-
level analysis 多層次分析
The impact of family policies 家庭政策
on fertility in industrialised countries
• Public policies 公共政策 have an undeniable effect on families
• They regulate conditions of employment
• They define eligibility to welfare benefits
• They provide education and health services
• They define the rights and responsibilities of parents
• Public policies shape family life in defining rights, responsibilities,
opportunities, constraints
• They encourage some types of family structures over others, and provide
incentives or disincentives to cohabit, marry, divorce, to have children
within or outside the wedlock
• The social policy  fertility question is complex.
• These links depend on the type of policies, the level of benefits, the conditions of
eligibility, the income and opportunity sets of individuals, and the norms, stigma
and sanctions associated with the receipt of benefits.
Theoretical framework
• Variants of rational choice theory 理性選擇理論 , including the new home
economics theory, were used to study the policy-fertility relationship.
• According to the neoclassic economic theory of fertility, the decision to have a
child is subject to an economically rational decision (a utility maximization
process), and is a function of the economic cost and benefits of children, subject
to an income constraint and to individuals’ preferences for children (as opposed
to other goods).
•  A reduction in the cost of children (as a result of public subsidy) or an in-
crease of income (as a result of transfer payments) is expected to increase the
demand for children (Becker 1981)
• Family policies s.a. child and family cash allowances, tax relief for
children, subsidies to childcare, and maternity and parental leave bene-
fits are expected to have a positive impact on fertility by reducing the
direct or indirect (opportunity) cost of children or by increasing individu-
als’ income.
5 assumptions
• Although this economic model is very influential in the literature, it is also reliant
on 5 strong assumptions:
1. An increase in income  increase in demand for children (however, the increase
might be in increased quality of children, for example, their education)
2. Decisions are made based on full information (however, imperfect information
is more likely, for example regarding the perceived cost of children)
3. Having a child, marrying, divorcing treated like an economically rational decision
(however, decisions are often ‘appropriate’, ‘adequate’, rather than ‘rational’)
4. Preferences for children are taken for granted (however, policies might also in-
fluence the formation of preferences, as well as factors such as peers, neigh-
bors, habits, traditions, and publicity) (Becker 1996)
5. Preferences regarding children are treated as homogenous among household
members (instead, preferences may differ among household members) (Rasul
2022).
Empirical evidence
• Family cash benefits 家庭現金福利  fertility (O)
• Ex. Gauthier and Hatzius (1997) find that a 25% increase in family al-
lowances results in an increase of the total fertility rate (TFR) of 0.07 children
per woman
• But, policies might have differential effects per birth order (ex. Second child
or third child rather than the first child)
• Results are complec and depend on policy design as well (e.g. level of bene-
fits, eligibility criteria)
• Work-related policies  fertility (~)
• Effect of parental and maternity leave policies 育嬰假和產假政策 seen in CAN
(Hyatt & Milne 1991), not in AT (Hoem et al. 2001)
• Childcare cost and availability 托兒費用和可用性 : positive effect in a multicountry
analysis (Del Boca et al. 2003); no statistically significant impact in NOR, FIN
(Ronsen 2004), DE (Hank & Kreyenfeld 2003), SWE (Andersen et al. 2004)
Are family policies effective?
• The measurement of policies is a challenge: need to consider eli-
gibility criteria, benefit caps, employer-provided benefits…
• People’s preferences might follow the channels of (1) reduction
of children costs (2) increase in family incomes (3) increase in
the preference of children. But, concomitant variations and links
between policies, wages, and female labor force participation
make the picture more complex
• Need to take into account social and economic differences across
families
• Results of empirical analyses need to take into account the mag-
nitude of the impact of policies and the differential impact by
birth order
• Castles (2003)
Take away lesson from this class
• --
Glossary
• Family policies 家庭政策 • Family cash benefits 家庭現金
• Liberal Market Economies 福利
(LME) 自由市場經濟 • Parental and maternity
• Coordinated Market leave policies 育嬰假和產假政策
Economies (CME) 協調的市場經濟 • Childcare cost and avail-
• Cluster 聚類 ability 托兒費用和可用性 :
• Rational choice theory 理性選
擇理論
 Next time:
Gender and political preference 性
別和政治偏好 (10/14)
What do men and women vote?
男人和女人投票什麼 ?
Thinking exercise 
Political Economy of Welfare and Gender Inequality (PEWGI), 2024-2
Graduate Institute of National Development, NTU
Instructor: Dr. Ijin Hong