A Pooled Time-Series Analysis on the Relation Between Fertility and Female Employment Over Space and Time

Henriette Engelhardt, Austrian Academy of Sciences
Alexia Fuernkranz-Prskawetz, Vienna Institute of Demography

Various authors find that in OECD countries the cross-country correlation between fertility and female employment turned from a negative value before the 1980s to a positive value thereafter. In this paper we try to combine methodological and substantial reasons for model selection and specification to analyze unmeasured country and time heterogeneity with respect to female employment. Using data of 22 OECD countries from 1960-2000 we estimate pooled time series models of fertility and female employment by applying random and fixed effects panel models as well as Prais-Winston regressions with panel-corrected standard errors and autoregressive errors. Our empirical findings reveal substantial differences across countries and time periods in the effects of female employment on fertility. Initial increases in female employment strongly lowers fertility, but continued increases have a progressively less negative effect. The country heterogeneity in the effect of female employment can also be confirmed for different regions as well as for varying welfare and gender regimes.