اشتغال چرخه عمر و باروری در سرتاسر محیط های سازمانی

In this paper, we formulate a dynamic utility maximization model of female labor force participation and fertility choices and estimate approximate decision rules using data on married women in Italy, Spain and France. The estimated decision rules indicate that first-order state dependence is the most important factor determining female labor supply behavior in all three countries. We also find that cross-country differences in state dependence effects are consistent with the order of country-level measures of labor market flexibility and child care availability. Counterfactual simulations of the model indicate that female employment rates in Italy and Spain could reach EU target levels were French social policies to be adopted in those countries.

The growth in women's participation in the labor market, especially among women with children, has been one of the most important economic and social phenomena of the last half century. The large scale movement of women into the labor market since the end of World War II has occurred in many different countries. However, the level of female employment rates across countries is still far from having converged, and the influence of social policies on female employment rates is not clearly understood. This has raised serious policy concerns, particularly in Europe, where the European Union (EU) has set quantitative targets for higher female employment rates for all member states.1 In order to try and better understand what underlies cross-country differences in female labor force participation rates, we formulate a general dynamic utility maximization model of female labor supply behavior and fertility choices, and estimate the approximate decision rules of the model separately for married women in Italy, Spain and France. The main focus is on measuring the differential relative importance of state dependence and unobserved heterogeneity in country-specific decision rules, and establishing a connection between the differential relative importance and variation across countries in social policies. With this purpose in mind, we limit the set of countries in the analysis to only those with “similar” cultural characteristics—i.e., Italy, Spain and France. This helps distinguish social policy variation across countries from confounding factors related to culture, such as attitudes towards gender roles. The reason for focusing on the differential relative importance of state dependence and unobserved heterogeneity in female work and fertility choices is that past research on female labor force participation has repeatedly shown that persistence is an important aspect of the labor supply decisions of married women (see, e.g., Heckman and Willis, 1977; Heckman, 1981; Nakamura and Nakamura, 1985; Eckstein and Wolpin, 1989). Persistence in participation status may be due to state dependence which arises from human capital accumulation or the costs of searching for a new job. The costs of searching for a new job are, in turn, affected by social policies such as the extent of employment regulation and the availability of child care. However, persistence can also be accounted for by permanent unobserved heterogeneity that reflects differences in mostly immutable preferences for work and/or productivity in the labor market. If unobserved heterogeneity is not properly accounted for in estimation, one may obtain spurious state dependence effects and make faulty inferences about the importance of adjustment costs, social policies, and the institutional environment. Although several recent studies have also concentrated on disentangling state dependence from permanent unobserved heterogeneity in female labor supply (see e.g., Hyslop, 1999; Carrasco, 2001), to the best of our knowledge, there is no previous work that analyzes the differential relative importance of these factors across countries. Thus, no previous studies have examined the hypothesis that institutions governing social policies are important underlying sources of cross-country differences in state dependence. Institutions which make it more costly to adjust employment levels from one period to the next should generate more persistence and state dependence in female labor supply. The approximate decision rules that we estimate indicate that state dependence, as opposed to unobserved heterogeneity, is clearly the most important factor determining persistence in labor market participation in all three countries. We also find that the order of state dependence effects across countries is correlated with the order in aggregate measures of labor market flexibility and child care availability. This is consistent with the existence of important differences in institutional environments. It also suggests that employment and child care policies, which affect participation adjustment costs, are additional causes of state dependence and hence cross-country variation in the level of female employment rates. The estimated decision rules are also used to perform counterfactual simulations. The simulations show that female employment rates in Italy and Spain could reach EU target levels, at least 60% by 2010, were French-like social policies to be adopted in those countries. Under French parameters, Italian and Spanish female participation rates substantially converge towards the higher French female participation rate of 68%. We find that Italian participation rates increase from 53% to 63%, and Spanish female participation rates rise dramatically from 35% to 62%. One caveat for our results is that they are based on approximate decision rules rather than exact ones. Adopting an exact solution approach would have been much more computationally intensive, but would also have better incorporated cross-equation and forward-looking restrictions implied by the dynamic decision problem. Thus, exact decision rules may look very different from approximate ones. The rest of this paper is organized as follows. In the next section, we provide a brief background on the relationship between female labor market participation and fertility choices that motivates our model of joint decision-making. In Section 3, we describe the data. Section 4 outlines the life cycle model of labor market participation and fertility decisions. Section 5 discusses estimation of approximate decision rules. Section 6 presents the estimation results and assesses model fit. Section 7 correlates the estimated state dependence effects with aggregate measures of social policies, and reports the results of counterfactual simulations. The last section of the paper summarizes and concludes.

In this paper, we formulate a general dynamic utility maximization model of female labor market participation and fertility choices and estimate the approximate decision rules of the model using data from the ECHP on married women in Italy, Spain, and France. The main focus of the paper is on measuring the differential relative importance of state dependence and permanent unobserved heterogeneity in work and family preferences across countries. The estimated decision rules indicate that in each country first-order state dependence is the most important factor explaining female labor force participation rates. We examine the relationship between first-order state dependence and aggregate measures of social policies, and find that the order of state dependence effects is consistent with the cross-country ranking in the extent of labor market flexibility and the supply of child care services. This suggests important differences in institutional environments. We also use the estimated decision rules to quantify the effects of the institutional environment by simulating counterfactual female participation and birth outcomes when women in one country face the decision rule parameters of a different country. The results of the simulation suggest that Italian and Spanish women would substantially increase their participation in the labor market were they to face the relatively more flexible French social policy environment. The convergence of Italian and Spanish participation rates to the higher estimated French rates is especially pronounced amongst less educated women. The counterfactual simulation indicates that female employment rates in Italy and Spain would reach EU target levels, at least 60% by 2010, were French social policies to be adopted in those countries. One limitation of our study is that we were only able to provide indirect evidence on the effects of employment and social policies on female labor market participation and persistence. This is the only way to proceed when aggregate proxies for social policies do not vary sufficiently over individuals and over time. If better proxies for social policies were to become available, then direct evidence of policy effects might be obtainable by directly entering the proxies into the individual's approximate decision rules. This remains an area for future data collection and research. An additional limitation of our study is that we estimate approximate decision rules rather than exact decision rules. The exact solution approach is computationally more intensive, but it more faithfully incorporates cross-equation and forward-looking restrictions implied by the dynamic decision problem. Thus, exact decision rules may look very different from approximate ones. The comparison of exact and approximate decision rules is another area for future research.