Family policy, fertility and labour force participation

Tom Kornstad, Statistics Norway
Arnstein Aassve, Università Bocconi
Marit Rønsen, Statistics Norway

The paper analyses the relationship between fertility and female labour force participation using register data from Norway. The approach is different from most previous studies on this topic, in that we provide an exact model of the Norwegian benefit system starting in 1987. Thus, an important contribution over most other studies, is that we are able to assess the impact of the overall benefit package as it unfolded over 25 years. We estimate hazard regressions for entering and exiting the labour force, and fertility, where regressions are done separately by parity. For every individual and for every year, we calculate the benefit, which is then included as a time varying covariate. In addition, we include individuals’ predicted wage, again entering the hazard regressions as time varying covariates. Once the model is estimate, we will undertake a series of simulations to assess the importance of the policy package available with respect to the two outcomes of interest – namely fertility progression and labour force participation.