Family Policy and the Causal Effect of Mother's Employment on Childbearing Outcomes in Norway

Trude Lappegård, Statistics Norway
Mette Gerster, University of Copenhagen

Family policy in the Nordic countries makes a combination of female labour work and childrearing feasible, and the majority of mothers, including those with small children, are employed outside the home. This paper investigates the relationship between family policy and the casual effect of mother's employment on childbearing outcomes in Norway. Using a simultaneous equation modeling approach we take into account the possible endogeneity of mother's employment status due to fertility preferences. The analysis is based on longitudinal information on mothers work activity, parental leave use and childbearing from administrative register data of all intact unions during a 10 year period. We assume there are policy implications for the effect of the mother's employment on her fertility decisions, i.e. differences due to human capital investments and parents use of parental leave policy, but only small differences due to the mother's labour market attachment.